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Q & A Data Base
FINANCE & CONTROLLING

BALCO
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Blueprint_FICO_BALCO
Table of Contents
1. Cross-Application/Central Organizational Units.....................................................................8
1.1. Company............................................................................................................................8
1.2. Credit Control Area.............................................................................................................9
1.3. Company Code...................................................................................................................9
2. Financial Accounting..............................................................................................................13
2.1. Chart of Accounts...............................................................................................................13
3. Asset Accounting...................................................................................................................14
3.1. Depreciation area................................................................................................................14
3.2. Chart of depreciation...........................................................................................................15
3.3. Asset class..........................................................................................................................15
B. Master Data..................................................................................................................................16
1. General Master Records........................................................................................................16
1.1. Customer Master Record....................................................................................................16
1.2. Vendor Master Record........................................................................................................16
1.3. Bank/Bank Directory TR/FI.................................................................................................17
1.4. Taxes..................................................................................................................................17
2.1. G/L Account........................................................................................................................17
2.2. Ledger.................................................................................................................................18
3. Asset Accounting ..................................................................................................................19
C. Business Processes.....................................................................................................................20
1.1. Basic Settings.....................................................................................................................20
1.1.1. Fiscal Year and Posting Periods ....................................................................................20
1.1.2. Document........................................................................................................................21
1.1.3. Posting Help....................................................................................................................22
1.1.4. Tax on Sales/Purchases in SAP System.........................................................................22
1.1.5. Withholding Tax...............................................................................................................23
1.2. General Ledger Accounting................................................................................................23
1.2.1. Postings in G/L................................................................................................................23
1.2.1.1. Park G/L Account Document........................................................................................23
1.2.1.2. G/L Account Posting.....................................................................................................23
1.2.1.3. Recurring Entry.............................................................................................................24
1.2.1.4. Document Reversal......................................................................................................24
1.2.2. General Ledger Account Analysis....................................................................................24
1.2.2.1. General Ledger Line item Analysis...............................................................................24
1.2.3. Account Clearing [GL]......................................................................................................24
1.2.3.1. Automatic Clearing........................................................................................................24
1.2.4. Closing Operations..........................................................................................................25
1.2.4.1. Regroup Receivables/Payables....................................................................................25
1.2.4.2. GR/IR Clearing Account Maintenance..........................................................................25
1.2.4.3. Financial Statement Creation........................................................................................26
1.2.4.4. Periodic Reports...........................................................................................................26
1.2.4.5. Carry Forward G/L Balances........................................................................................27
1.2.5. Integration........................................................................................................................27
1.3. Accounts Payable...............................................................................................................27
1.3.1. Vendor Down Payments..................................................................................................27
1.3.2. Invoices and Credit Memos.............................................................................................28
1.3.2.1. Vendor Document Parking............................................................................................28
1.3.2.2. Invoice Receipt.............................................................................................................28
1.3.2.3. Vendor Credit Memo.....................................................................................................29
1.3.2.5. Recurring Entry.............................................................................................................30
1.3.3. Vendor Account Analysis.................................................................................................30
1.3.3.1. Vendor Line Item Analysis............................................................................................30
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1.3.3.2. Balance Analysis...........................................................................................................30
1.3.3.3. Vendor Account Evaluations.........................................................................................30
1.3.4. Vendor Payments............................................................................................................30
1.3.4.1. Vendor Payment Request.............................................................................................32
1.3.4.2. Release for Payment....................................................................................................32
1.3.4.3. Manual Outgoing Payments..........................................................................................32
1.3.4.4. Automatic Outgoing Payments.....................................................................................32
1.3.4.5. Vendor Payment Medium Creation...............................................................................33
1.3.5. Account Clearing [AP]......................................................................................................34
1.3.6. Interest Calculation [A/P].................................................................................................34
1.3.6.1. Vendor Account Balance Interest Calculation...............................................................34
1.3.6.2. 00Calculation of Interest on Arrears – Vendors............................................................35
1.3.7. Correspondence with Vendors.........................................................................................35
1.3.7.1. Correspondence with Vendors......................................................................................35
1.4. Accounts Receivable..........................................................................................................36
1.4.1. Customer Down Payments..............................................................................................36
1.4.1.1. Customer Down Payment.............................................................................................36
1.4.2. Invoices and Credit Memos.............................................................................................37
1.4.2.1. Customer Document Parking........................................................................................37
1.4.2.2. Outgoing Invoice...........................................................................................................37
1.4.2.3. Customer Credit Memo.................................................................................................37
1.4.2.5. Recurring Entry.............................................................................................................38
1.4.3. Account Analysis [A/R].....................................................................................................38
1.4.3.1. Customer Line Item Analysis........................................................................................38
1.4.3.2. Balance Analysis...........................................................................................................38
1.4.3.3. 0Credit Management Analysis......................................................................................38
1.4.3.4. Customer Evaluations...................................................................................................39
1.4.4. 0Customer Payments......................................................................................................39
1.4.4.1. Payment Advice Note Processing.................................................................................39
1.4.4.2. 0Release for Payment..................................................................................................40
1.4.4.3. Manual Incoming Payments..........................................................................................40
1.4.4.4. Automatic Incoming Payments.....................................................................................40
1.4.4.5. Customer Payment Medium Creation...........................................................................41
1.4.4.6. Manual Payment by Bill of Exchange............................................................................41
1.4.4.7. Bill of Exchange Usage.................................................................................................42
1.4.5. Account Clearing [AR]......................................................................................................42
1.4.6. Dunning Notice................................................................................................................42
1.4.6.1. Automatic Dunning........................................................................................................42
1.4.7. Interest Calculation [A/R] ................................................................................................43
1.4.7.1. Customer Account Balance Interest Calculation...........................................................43
1.4.7.2. Calculation of Interest on Arrears - Customers.............................................................43
1.4.8. Correspondence with Customers.....................................................................................44
1.4.8.1. Correspondence with Customers..................................................................................44
1.5. Bank Accounting.................................................................................................................44
1.5.1. 0Incomings......................................................................................................................44
1.5.1.1. Cash Journal.................................................................................................................44
1.5.1.2. Manual Account Statement...........................................................................................45
1.5.1.3. Check Deposit Transaction...........................................................................................45
1.5.1.4. Bill of Exchange Presentation (Debit)...........................................................................46
1.5.1.5. Cash Journal.................................................................................................................46
1.5.2. Check Management.........................................................................................................47
1.5.2.1. Manage Check Balance................................................................................................47
1.5.3. Account Balance Interest Calculation..............................................................................47
1.5.3.1. Account Balance Interest Calculation...........................................................................47
1.6. Special Purpose Ledger .....................................................................................................47
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2. Asset Accounting...................................................................................................................48
2.1. Handling Fixed Assets........................................................................................................48
2.1.1. Asset Maintenance..........................................................................................................48
2.1.1.1. Creation of Master Record for Tangible Assets............................................................48
2.1.1.2. Asset Master Record Change.......................................................................................49
2.1.1.3. Mass Change................................................................................................................49
2.1.2. Receipts...........................................................................................................................50
2.1.2.1. Direct Acquisition of Internal Activity.............................................................................50
2.1.2.2. Processing of Asset Acquisition....................................................................................50
2.1.2.3. Subsequent Acquisition................................................................................................52
2.1.3. Depreciation.....................................................................................................................52
2.1.3.1. Creation of Reserves from Gain from Asset Retirement...............................................52
2.1.3.2. Reserves Carry forward................................................................................................52
2.1.3.3. Depreciation Processing...............................................................................................53
2.1.3.4. Manual Depreciation Planning......................................................................................53
2.1.3.5. Depreciation Posting.....................................................................................................54
2.1.3.6. Unit-of-Production Depreciation....................................................................................54
2.1.4. Business Transactions.....................................................................................................54
2.1.4.1. Settlement of Asset under Construction........................................................................54
2.1.4.2. Post-capitalization.........................................................................................................56
2.1.4.3. Write-up 56
2.1.4.4. Reposting......................................................................................................................56
2.1.5. Specific Valuations...........................................................................................................57
2.1.5.1. Closing of Insurance Contract.......................................................................................57
2.1.5.2. Revaluation...................................................................................................................58
2.1.6. Group Requirements........................................................................................................58
2.1.6.1. Transfer Within a Client................................................................................................58
2.1.6.2. Creation of Master Record for Tangible Assets............................................................59
2.1.7. Retirements.....................................................................................................................59
2.1.7.1. Retirement....................................................................................................................59
2.1.7.2. Mass Retirement...........................................................................................................60
2.1.8. Closing Operations [Asset Accounting]............................................................................60
2.1.8.1. Multiple Valuations........................................................................................................61
2.1.8.2. Preparations for Year-End Closing in Asset Management............................................61
2.1.8.3. Depreciation Simulation / Forecast...............................................................................61
2.1.8.4. Mass Change................................................................................................................62
2.1.8.5. Recalculation of Depreciation.......................................................................................62
2.1.8.6. Depreciation posting.....................................................................................................63
2.1.8.7. Carry Out Year-End Closing in Asset Management......................................................63
2.2. Handling of Leased Assets.................................................................................................64
2.2.1. Asset Maintenance..........................................................................................................65
2.2.1.1. Asset Master Record Change.......................................................................................65
2.2.1.2. Mass Change................................................................................................................65
2.2.2. Receipts...........................................................................................................................66
2.2.2.1. Acquisition of Leased Asset..........................................................................................66
2.2.3. Depreciation.....................................................................................................................66
2.2.3.1. Depreciation Processing...............................................................................................66
2.2.4. Business Transactions.....................................................................................................67
2.2.4.1. Transfer Leased Asset..................................................................................................67
2.2.4.2. Change in a Leasing Agreement N/A............................................................................67
2.2.5. Specific Valuations...........................................................................................................68
2.2.5.1. Closing of Insurance Contract.......................................................................................68
2.2.6. Retirements.....................................................................................................................69
2.2.6.1. Retirement of Leased Asset N/A...................................................................................69
2.2.7. Closing Operations..........................................................................................................70
2.2.7.1. Multiple Valuations........................................................................................................70
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2.2.7.2. Preparations for Year-End Closing in Asset Management............................................71
2.2.7.3. Depreciation Simulation / Forecast...............................................................................71
2.2.7.4. Mass Change................................................................................................................72
2.2.7.5. Recalculation of Depreciation.......................................................................................72
2.2.7.7. Carry Out Year-End Closing in Asset Management......................................................73
D. Organization.................................................................................................................................76
1. Cross-Application/Central Organizational Units.....................................................................76
1.1. Controlling Area..................................................................................................................76
1.2. Profit Center........................................................................................................................77
1.3. Operating Concern..............................................................................................................78
E. Master Data..................................................................................................................................79
1. Revenue and Cost Controlling...............................................................................................79
1.1. Overhead Cost Controlling..................................................................................................79
1.1.1. Cost Element...................................................................................................................79
1.1.1.1. Primary Cost Element...................................................................................................79
1.1.1.2. Secondary Cost Element..............................................................................................79
1.1.1.3. Cost Element Group.....................................................................................................79
1.1.2. Cost Center......................................................................................................................79
1.1.2.1. Cost Center...................................................................................................................79
1.1.2.2. Standard Hierarchy for Cost Centers............................................................................79
1.1.2.3. Cost Center Group........................................................................................................80
1.1.3. Activity Type....................................................................................................................80
1.1.3.1. Activity Type.................................................................................................................80
1.1.3.2. Activity Type Group.......................................................................................................80
1.1.4. Statistical Key Figures.....................................................................................................80
1.1.4.1. Statistical Key Figures..................................................................................................80
1.1.4.2. Statistical Key Figure Group.........................................................................................81
1.1.5. Business Process............................................................................................................81
1.1.5.1. Business Process.........................................................................................................81
1.1.5.2. Standard Hierarchy for Business Processes.................................................................81
1.1.5.3. Business Process Group..............................................................................................81
1.1.6. Internal Order...................................................................................................................82
1.2. Product Cost Controlling.....................................................................................................82
1.2.1. Procurement Alternative..................................................................................................82
1.2.2. Cost Component..............................................................................................................82
1.2.3. Product Cost Collectors...................................................................................................83
1.2.4. Material Ledger Data.......................................................................................................84
1.3. Profitability Analysis............................................................................................................84
1.3.1. Characteristics.................................................................................................................84
1.3.1.1. Characteristic Definition................................................................................................84
1.3.1.2. Characteristic Values....................................................................................................84
1.3.1.3. Characteristic Derivation...............................................................................................85
1.3.2. Value Fields.....................................................................................................................85
1.3.2.1. Definition of Value Fields..............................................................................................85
1.3.3. Condition Types...............................................................................................................86
1.3.3.1. Definition of Condition Types........................................................................................86
F. Business Processes.....................................................................................................................86
1. Revenue and Cost Controlling...............................................................................................86
1.1. Profit and Cost Planning.....................................................................................................86
1.1.1. Cost and Activity Planning...............................................................................................86
1.1.1.1. Copy Plan from Previous Year to Cost Center Planning...............................................86
1.1.1.2. Copy Actual Data to Cost Center Plan..........................................................................87
1.1.1.3. Redefinition of Plan Version..........................................................................................87
1.1.1.4. Planning Revaluation....................................................................................................87
1.1.1.5. Budget Planning............................................................................................................87
1.1.1.6. Order Budgeting............................................................................................................88
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1.1.1.7. Activity Type Planning...................................................................................................88
1.1.1.8. Definition of Activity Type for Cost Center....................................................................88
1.1.1.9. Transfer of Statistical Key Figures from LIS (Plan).......................................................88
1.1.1.10. Transfer of Depreciation/Interest (Activity-Independent).............................................89
1.1.1.11. Transfer of Depreciation/Interest (Activity-Dependent)...............................................89
1.1.1.12. Transfer of Personnel Costs.......................................................................................89
1.1.1.13. Transfer of Scheduled Activity PP -> CO-ABC...........................................................89
1.1.1.14. Transfer of Scheduled Activity from PP to CO-OM-CCA............................................90
1.1.1.15. Primary Cost Planning (Full Costs).............................................................................90
1.1.1.16. Primary Cost Planning (Prop./Fixed)...........................................................................90
1.1.1.17. Secondary Cost Planning (Full Costs)........................................................................90
1.1.1.18. Secondary Cost Planning (Prop./Fixed)......................................................................90
1.1.1.19. Cost Element Planning (Order with Integrated Planning)............................................91
1.1.1.20. Cost Element Planning (Order)...................................................................................91
1.1.1.21. Overall Planning (Order).............................................................................................91
1.1.1.22. Unit Costing (Order)....................................................................................................91
1.1.1.23. Easy Cost Planning and Execution Services (CO)......................................................91
1.1.1.24. Periodic Reposting of Plan Data.................................................................................92
1.1.1.25. Cost Accrual - Plan.....................................................................................................92
1.1.1.26. Process Cost Planning................................................................................................92
1.1.1.27. Overhead Calculation (Cost Center)...........................................................................92
1.1.1.28. Overhead Calculation (Business Process)..................................................................92
1.1.1.29. Overhead Calculation (Overhead Cost Order)............................................................97
1.1.1.30. Plan Cost Distribution.................................................................................................97
1.1.1.31. Settlement of Overhead Cost Orders (Planning Data)................................................97
1.1.1.32. Plan Cost Assessment................................................................................................98
1.1.1.33. Plan Reconciliation.....................................................................................................98
1.1.1.34. Splitting 98
1.1.1.35. Planned Price Calculation...........................................................................................99
1.1.2. Product Cost Planning.....................................................................................................99
1.1.2.1. Preparation for Costing.................................................................................................99
1.1.2.2. Standard Cost Estimate with Quantity Structure...........................................................100
1.1.2.3. Standard Cost Estimate Without Quantity Structure.....................................................101
1.1.2.4. Standard Cost Estimate for Co-Products......................................................................102
1.1.2.5. Costing Analysis...........................................................................................................102
1.1.2.6. Price Release with Standard Cost Estimate.................................................................102
1.1.2.7. Reference and Simulation Costing................................................................................103
1.1.2.8. Easy Cost Planning and Execution Services (CO)........................................................103
1.1.3. Profit Center Planning......................................................................................................103
1.1.3.1. Copy Plan from Previous Year -> Profit Center Planning.............................................103
1.1.3.2. Copy Actual Costs -> Profit Center Planning................................................................104
1.1.3.3. Redefinition of Plan Version (Profit Center Planning)...................................................104
1.1.3.4. Excel Upload -> Profit Center Planning........................................................................104
1.1.3.5. Plan Integration of Profit Centers..................................................................................104
1.1.3.6. Manual Profit Center Planning......................................................................................104
1.1.3.7. Profit Center Distribution: Plan......................................................................................105
1.1.3.8. Plan: Profit Center Assessment....................................................................................105
1.1.3.9. Profit Center Analysis...................................................................................................105
1.2. Actual Cost/Revenue Allocation..........................................................................................105
1.2.1. Overhead Allocation.........................................................................................................105
1.2.1.1. Direct Activity Assignment Using Time Sheet Processing............................................105
1.2.1.2. Time Sheet Permit........................................................................................................106
1.2.1.3. Transfer Time Sheet Data to CO..................................................................................106
1.2.1.4. Time Sheet Report........................................................................................................106
1.2.1.5. Direct Activity Allocation (Controlling)...........................................................................107
1.2.1.6. Transfer of Primary Costs to Cost Center/Order...........................................................107
1.2.1.7. Manual Funds Reservation...........................................................................................107
1.2.1.8. Manual Funds Reduction..............................................................................................107
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1.2.1.9. Manual Cost Allocation.................................................................................................108
1.2.2. Product Cost Allocation....................................................................................................108
1.2.2.1. Simultaneous Costing...................................................................................................108
1.2.3. Profit Center Allocation....................................................................................................109
1.2.3.1. Actual Data Transfers on Profit Center.........................................................................109
1.2.3.2. Document Entry in Profit Center Accounting.................................................................109
1.2.3.3. Actual Transfer of Additional Balance Sheet Items to EC-PCA....................................109
1.2.3.4. Manual Entry of Statistical Key Figures........................................................................109
1.2.4. Cost and Revenue Allocation to Profitability Analysis......................................................109
1.2.4.1. Transfer and Valuation of Incoming Sales Orders........................................................109
1.2.4.2. Transfer and Valuation of Billing Documents (Direct Sale)...........................................110
1.2.4.3. Transfer and Valuation of Billing Documents (Third-Party Transaction).......................110
1.2.4.4. Transfer and Valuation of Billing Documents (Inter-company Processing)...................111
1.2.4.5. Transfer and Valuation of Billing Documents (Complaints Processing)........................111
1.2.4.6. Transfer of Customer Agreements to Profitability Analysis...........................................111
1.2.4.7. Direct Posting of Costs and Revenues From FI............................................................111
1.2.4.8. Automatic Additional Transfer into Profitability Analysis...............................................112
1.3. Period-End Closing (Controlling)........................................................................................113
1.3.1. Period-End Closing in Overhead Cost Controlling...........................................................113
1.3.1.1. Actual Periodic Reposting.............................................................................................113
1.3.1.2. Accrual Calculation in Cost Center Accounting (Target = Actual Method)....................113
1.3.1.3. Accrual Calculation in Cost Center Accounting (Percentage Method)..........................113
1.3.1.4. Actual Cost Distribution.................................................................................................113
1.3.1.5. Entry of Sender Activities..............................................................................................114
1.3.1.6. Actual Indirect Activity Allocation (Manual Entry)..........................................................114
1.3.1.7. Actual Indirect Activity Allocation (Indirect Entry)..........................................................114
1.3.1.8. Target=Actual Activity Allocation...................................................................................115
1.3.1.9. Template Allocation (Overhead Cost Order).................................................................115
1.3.1.10. Overhead Calculation (Overhead Cost Order)............................................................115
1.3.1.11. Settlement of Overhead Orders (Actual Data)............................................................115
1.3.1.12. Settlement of Accrual Orders......................................................................................116
1.3.1.13. Actual Cost Assessment.............................................................................................116
1.3.1.14. Overhead Calculation (Business Process)..................................................................116
1.3.1.15. Variance Calculation for Overhead.............................................................................121
1.3.1.16. Pre-distribution of Fixed Costs....................................................................................121
1.3.1.17. Splitting 122
1.3.1.18. Actual Price Calculation..............................................................................................122
1.3.1.19. Revaluation at Actual Prices.......................................................................................122
1.3.1.20. Reconciliation Financial Accounting/Controlling.........................................................123
1.3.1.21. Business Process Analysis.........................................................................................123
1.3.1.22. Cost Center Analysis..................................................................................................123
1.3.1.23. Analysis of Overhead Orders......................................................................................123
1.3.2. Period-End Closing: Periodic Product Cost Controlling...................................................123
1.3.2.1. Template Allocation (Cost Object)................................................................................123
1.3.2.2. Revaluation at Actual Prices.........................................................................................124
1.3.2.3. Actual Cost Distribution - Product Costs.......................................................................124
1.3.2.4. Overhead Calculation (Cost Object).............................................................................124
1.3.2.5. Template Allocation (Product Cost Collector)...............................................................124
1.3.2.6. Overhead Calculation (Product Cost Collector)............................................................125
1.3.2.7. WIP Calculation Based on Target Costs.......................................................................125
1.3.2.8. Periodic Variance Calculation.......................................................................................125
1.3.2.9. Settlement of Cost Object Hierarchy.............................................................................126
1.3.2.10. Settlement of Product Cost Collector..........................................................................126
1.3.2.11. Data Collection for Product Drilldown.........................................................................126
1.3.2.12. Product Cost Analysis in Product Cost by Period.......................................................127
1.3.3. Period-End Closing for Profit Center Accounting.............................................................127
1.3.3.1. Profit Center Distribution: Actual...................................................................................127
1.3.3.2. Actual Profit Center Assessment..................................................................................127
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1.3.3.3. Profit Center Analysis...................................................................................................127
1.3.4. Period-End Closing for Profitability Analysis....................................................................128
1.3.4.1. Settlement of Sales Orders...........................................................................................128
1.3.4.2. Settlement of Production Variances..............................................................................128
1.3.4.3. Settlement of Internal Orders (Actual Data)..................................................................128
1.3.4.4. Project Settlement.........................................................................................................128
1.3.4.5. Actual Allocation of Process Costs to Profitability Analysis...........................................129
1.3.4.6. Actual Allocation of Cost Center Costs to Profitability Analysis....................................129
1.3.4.7. Actual Top-Down Distribution.......................................................................................129
1.3.4.8. Analysis of Results and Contribution Margins...............................................................130
A Organization
1. Cross-Application/Central Organizational Units
1.1. Company
Questions:
Q: 1) Do you want to structure the company into one or more separate

legal entities?
A: One entity
Q: 2) Do you have foreign companies?
A: At present - No
Q: 3) Which companies are going to work with which chart of account?
A: At present, N/A
Q: 4) In which currencies are the transactions posted in the companies?
A: At present, N/A
Q: 5) Are all companies managed in FI company codes, and is FI integration

used?
A: At present, N/A
Q: 6) In which form and at which dates do you collect the reported

financial data from the individual companies?
A: At present, N/A
8
Q: 7) Does the divestiture of a company entail a reclassification to another
consolidation group, or is this a final consolidation?
A: At present, N/A
1.2. Credit Control Area
Questions:
Q: 1) On which level do you perform credit control? On company code

level, cross-company code level or a lower level? (Integration)
A: One Credit control area
Q: 2) What is the default credit limit for your customers?
A: depends on customers
Q: 3) If you are not using SAP's Sales and Distribution component, how will
you perform credit checks and which actions will they trigger?
A: N/A
1.3. Company Code
Questions:
Q: 1) Which legal entities (company codes) will you have and in which
countries?
A: At present – BALCO India
Q: 2) What are the legal reporting requirements that these companies have
to comply with?
A: IAS AND IFRS
Q: 3) Which companies are required to use a statutory chart of accounts

for reporting purposes?
A: At present, N/A
Q: 4) Do all companies use the same operating chart of accounts?
A: At present, N/A
9
Q: 5) Will a different chart of accounts be used for consolidation purposes?
A: At present, N/A
Q: 6) Identify legal entities holding minority interest.
A: At present, N/A
Q: 7) Are goods/services exchanged between your different legal entities?
A: At present, N/A
Q: 8) Specify the different levels of consolidation (for example, by

country, by region).
A: At present, N/A
Q: 9) Are there any transactions that have to be included, when these

products are consolidated?
A: At present, N/A
Q: 10) Identify the legal entities that should be excluded from the
consolidation process. Please specify why they have to be excluded.
A: At present, N/A
Q: 11) For which enterprise entities that are not independent legal entities
do you require sub ledgers (accounts payable ledger, accounts receivable
ledger, asset accounting and so on)? For example, fixed assets per strategic
business unit. ).
A: At present, N/A
Q: 12) Which functions will be performed on a cross-company level?
A: At present, N/A
1.4 Controlling Area
Questions:
Q: 1) Note on controlling area:
A:
10
Q: 2) Are you using one centralized controlling system or do you follow a
decentralized approach with several independent controlling systems?
A: One
Q: 3) Provided that company codes use the same chart of accounts and
fiscal year variant: Which company code(s) do you want to assign to your
controlling area(s)?
A: BALCO assigned to BALCO controlling area
Q: 4) If you have multiple controlling areas: Do you intend to have

management charge-outs (allocations) across those controlling areas?
A: At present, N/A
Q: 5) If you wish to have unified Controlling, which currency or currencies

are you planning to use?
A: BHD
Q: 6) Which chart of accounts do you want to use in your controlling area?
A: BALCO
1.5 Profit Center
Questions:
Q: 1) Which criteria do you use for dividing your organization into internal
areas of responsibility?
A: Product-wise; One for production overheads; One for Corporate

overheads
Q: 3) Can you make unique profit center assignments for the following
master data: material/plant, cost center, sales order item, cost objects,
internal orders etc.?
A: Yes
Q: 4) As well as the "actual" profit centers, do you use any other profit
center, which provides services for various other profit centers (a service
profit center)?
A: Yes
11
Q: 8) Can the structure of your Profit Center (standard hierarchy) be
directly derived from the enterprise organization?
A: Yes
1.6 Operating Concern
Questions:
Q: 1) Are you using one central profitability controlling system (system from
an organizational viewpoint) or do you follow a decentralized approach with
several independent profitability controlling systems?
Explanation: Note: This means that different enterprise branches are

independent of each other, which does not enable you to analyze their
results usefully.
A: One concern
Q: 2) In SAP the operating concern is an organizational unit that spans one

or more controlling areas. Describe which controlling area(s) you want to
assign to your Operating Concern(s)!
A: BALCO
Q: 3) What currency should be used for the operating concern?
A: BHD
Material Valuation Area
Questions:
Q: 1) Is the value of a material the same throughout the company, or can

the value of the same material be different in different plants?
A: Same
Q: 2) Are you going to use Product Cost Planning and/or Production

Planning in R/3? If so, you need to set the valuation area to plant level.
A: Yes
12
1.7 Plant
Questions:
Q: 1) Are all plants in the same country? List the plants and countries.
A: Yes, as of now
Q: 2) Do you need special plants for your maintenance work apart from the
common logistics plants?
A: No
Q: 3) Which enterprise entities carry out production and what do they

produce?
A: All final and intermediaries
Q: 7) Does the manufacturing/distribution process for a product differ such

that the inventory value/cost structure is different at each facility/plant?
If so, please explain how.
A: No
2. Financial Accounting
2.1. Chart of Accounts
Questions:
Q: 1) Which companies use the same chart of accounts?
A: BALCO now
Q: 2) How many natural accounts will each chart of accounts contain?

(estimated)
A: <1000
Q: 3) What is the document numbering logic?
Explanation: Possible reconciliation with SD/MM
A: Stands alone
13
Q: 4) Describe how the account number is set up (for example: department,
natural account).
A: 100/200/300/400 – ASSET/liability/Income/Expenditure
Q: 5) Will the chart of accounts need to be approved? If so, by whom?
A: Yes, by FM
Q: 6) Which maintenance language should be used for each chart of

accounts?
A: English
Q: 7) Which additional languages do you wish to use for your charts of

accounts?
A: English
Q: 8) Please provide your current Chart of Accounts.
A: Given separately
3. Asset Accounting
Questions:
Q: 1) For which of your legal entities will you be implementing FI-AA?
A: BALCO now
3.1. Depreciation area
Questions:
Q: 1) Is there a distinction necessary between book depreciation (for

external balance sheet) and tax values (for a tax balance sheet)?
A: Not required now

Q: 2) Do you require additional parallel valuations for your assets, e.g., for
cost accounting purposes or for statutory reasons? If so, please specify
A: Not required now

14
Q: 3) Is there a distinction between taxation values and valuation of net
assets?
A: At present, N/A
3.2. Chart of depreciation
Questions:
Q: 1) In which countries do you manage fixed assets?
A: India now
Q: 2) Are there any statutory asset valuation requirements which would

involve parallel valuation in your financial accounting?
A: At present, N/A
3.3. Asset class
Questions:
Q: 1) Describe how your fixed assets are structured in the balance sheet?
A: Copy given
Q: 2) How do you classify your fixed assets at the moment? How do you
intend to classify your assets in the future?
A: List given
Q: 3 Do you manage low value assets (LVAs) as fixed assets, or do you post
them directly to an expense account?
A: At present – yes; But we would like to capitalize them for one year and
transfer to another data ledger for control by respective departments
Q: 4 Please list, or provide a list of the asset types that you intend to
manage in the Asset Accounting system (e.g. Land, Buildings, Intangibles,
etc).
A: List given separately
15
Q: 5 For each asset category (asset class), list the default depreciation
method and the period of depreciation you would like to use.
B. Master Data
1. General Master Records
1.1. Customer Master Record
Q: 1) What are your terms of payment for your customers?
A: SABIC 107 days; PIC generally 23 days

Q: 2) Are there any discounts linked to terms of payment, such as cash
discounts?
A: N/A
Q: 3) What kind of payments do you get from your customer?
A: Bank transfers
Q: 4) Are reminders sent? How long is the waiting period?
A: Yes, on due dates
Q: 5) Describe any other information relevant to customers.
A: -
1.2. Vendor Master Record
Questions:
Q: 1) Do you employ different payment terms by facility?
A: Yes
Q: 2) Do your vendors offer discounts for prompt payment (for example, 1%

cash discount within 10 days)? Provide a list of the payment terms you
require.
A: No
16
Q: 3) Do you have vendors who are subject to withholding tax?
Explanation: Possible to group with different account groups; Maintenance

of fields in master record. in master record.
A: No
1.3. Bank/Bank Directory TR/FI
Questions:
Q: 1) Which banks and bank accounts will you be using for incoming and
outgoing payments?
Q: 2) In what currencies are these accounts denominated?
A: USD,BD, EUR
Q: 3) Are certain payments handled by more than one bank (correspondent

banks/intermediary banks)?
A: [X] Yes
[ ] No
1.4. Taxes
Questions:
Q: 1) Will you use an external Tax Package to determine the appropriate

tax jurisdiction and/or tax rates to apply to purchasing documents and/or
vendor invoices? If yes, name the external package.
A: N/A
Q: 2) Will the tax jurisdiction codes be loaded into SAP?
A: N/A
2.1. G/L Account
Questions:
17
Q: 1) What procedure do you use when you need to create new account
numbers?
Explanation: This can occur centrally or decentralized; Sample accounts

can be used.
A: Centralized
Q: 2) Can you define groups of general ledger accounts that require similar
information in the master record?
A: Yes
Q: 3) How many retained earnings accounts do you have?
A: Profit & Loss Account, Retained earnings, Statutory and voluntary

reserve.
Q: 4) For which general ledger accounts do you wish to display line items?
A: AP, AR, CWIP, Accruals, GIT and all items needing the breakdown from
audit point of view
Q: 5) Which accounts do you wish to manage on an open item basis (for
example, bank clearing accounts)?
A: AP, Bank clearing accounts, ?
Q: 6) Which accounts do you wish to maintain in foreign currency (for

example, bank accounts)?
A: Bank accounts, AR, Revenue, AP, Loan accounts,
Q: 7) Describe any special requirements when posting to particular general

ledger accounts (for example, expense accounts require an associated cost
center).
A: Cost centres to be specified for all;
Q: 8) Which of your General Ledger accounts are not relevant to tax?
A: N/A
2.2. Ledger
Questions:
18
Q: 2) Do you have special statutory accounting requirements that are not
covered in other R/3 applications? Example: Currency translation of a
foreign subsidiary, different fiscal year ends to the international trading
partner.
Explanation: A special type of rendering of accounts is meant, which

requires a characteristic not contained in a standard SAP database.
A: No
3. Asset Accounting
Questions:
Q: 1) How many fixed assets and how many assets under construction do
you currently have?
A: About 10000
Q: 2) Which organizational units do you manage in the asset master record?
A: BALCO
Q: 3) Do you want asset master record numbering to be internally or

externally assigned?
A: Internally
Q: 4) Do you see a business need to use both internal and external number
assignment, depending on the asset class? If so, please specify.
A: Need to refer to equipment number of the supplier
Q: 5) If you use external number assignment, do you want to allow the

assignment of alphanumeric numbers?
A: [ ]Yes
[ X ]No
Q: 6) Do you want to represent asset components using asset sub-numbers?

If so, for what purposes do you plan to use asset sub-numbers?
A: Yes; When one major asset has to be broken up with different

depreciation periods
19
Q: 7) Are cost centers (business areas) to be defined in the asset master
record on a time-dependent basis?
A: No
Q: 8) Do you see a business need to create multiple similar asset master

records in one step?
A: Yes
Q: 9) Do you have assets that require increased depreciation due to

multiple shift use?
A: No
Q: 10) In your enterprise, is there a requirement to shut down an asset

(discontinue depreciation) for a period of time?
A: Yes, mainly for catalysts
Q: 11) How do you archive your asset master records at the present time?
A: Access based system
Q: 12) How long do you intend to continue to manage assets, which are no
longer on hand physically, in the system?
A: There is a scrapping/disposal procedure
C. Business Processes
1.1. Basic Settings
1.1.1. Fiscal Year and Posting Periods
Questions: Jan. – Dec., 16 periods
Q: 1) Do your posting periods correspond to the calendar months?
A: Yes
Q: 2) Is your fiscal year identical with the calendar year?
A: Yes
20
Q: 3) If your fiscal year is not identical with the calendar year, please
provide a schedule of period closing for the past, current and next year.
A: N/A
Q: 4) Do all your company codes have the same fiscal year/fiscal year
variant? Provide a detail if this is not the case.
A: N/A
Q: 5) When do you close your fiscal year?
A: December
Q: 6) Who is responsible for opening and closing accounting periods

(including for materials management)?
A: Management Accountant
1.1.2. Document
Questions:
Q: 1) What criteria do you use to classify your documents?
A: Transaction based
Q: 2) For which types of documents are the document numbers assigned

internally/externally?
Explanation: Are there any legal requirements?
A: No
Q: 3) What is the document numbering logic?
Explanation: Possible reconciliation with SD/MM
A: We can adopt SAP logic
Q: 4) Are the document numbers assigned on a yearly basis?
A: Yes
21
1.1.3. Posting Help
Questions:
Q: 1) Which help for posting do you need (such as account assignment

models, sample documents, control totals, user parameters)?
A: Templates, etc
1.1.4. Tax on Sales/Purchases in SAP System
Questions:
Q: 1) Value added tax: Which are the current tax rates in the countries of
your company codes?
A: At present, N/A
Q: 2) Value added tax: Do you have non-deductible taxes?
A: N/A
Q: 3) How do you handle taxes on imports (tax rate, reporting

requirements)?
A: At present, we have exemption; If there is duty, it is part of the landed

cost of materials, if known at the time of import. Otherwise we charge it
off
Q: 4) How do you handle taxes on exports (tax rate, reporting

requirements)?
A: At present, N/A
Q: 5) Do you have companies with plants in foreign countries?
Explanation: "Foreign plants" functions (SD/MM integration)
A: N/A
Q: 6) What are the tax reporting requirements?
A: N/A
Q: 7) How do you calculate taxes if there are cash discounts?
22
Explanation: Is tax calculated on the amount after cash discount?
A: N/A
Q: 8) To which G/L accounts will taxes be posted?
A: N/A
Q: 9) Do you use a particular exchange rate for taxes? If so, please specify.
A: N/A
1.1.5. Withholding Tax
Questions:
Q: 1) What are the reporting requirements for contractors, self-employed

etc. in your country?
A: N/A
Q: 2) How do you transmit this information to the tax authorities and your
vendors?
A: N/A
1.2. General Ledger Accounting

1.2.1. Postings in G/L
1.2.1.1. Park G/L Account Document
Questions:
Q: 1) What is your procedure for parking and releasing documents?
A: Authority levels are established in the system
1.2.1.2. G/L Account Posting
Questions:
Q: 1) What types of general ledger transactions do you process?
Explanation: Check document types
A: List given
23
Q: 2) Which internal documents do you need to print?
A: All documents, when required
1.2.1.3. Recurring Entry
Questions:
Q: 1) Do you have documents that occur on a regular basis (monthly or

quarterly, for example)?
A: Yes, given separately
1.2.1.4. Document Reversal
Questions:
Q: 1) How should a document reversal update the balances of the relevant

accounts?
A: There should be trace
Q: 2) Do you want to define a specific document type for reverse

documents?
A: Yes
1.2.2. General Ledger Account Analysis

1.2.2.1. General Ledger Line item Analysis
Questions:
Q: 1) Is there certain information that you wish to be able to display when

you view items online?
A: Required for all GL accounts
1.2.3. Account Clearing [GL]

1.2.3.1. Automatic Clearing
Questions:
Q: 1) By what criteria do you clear open items?
A: When the system automatically closes them
24
1.2.4. Closing Operations
Questions:
Q: 1) Which internal and external evaluations belong to month-end closing?
A: ?
Q: 2) Which processes do you use to prepare the month-end closing reports?
A: We have a manual process
Q: 3) Describe your current process and time frame for year-end closing.
A: 3 weeks
Q: 4) How do you specifically handle reporting for taxes on sales and

purchases and other statutory requirements?
A: N/A
Q: 5) What are your reconciliation procedures?
Explanation: Within Financial Accounting: (Does G/L accounting tally with

sub ledger accounting? Does Financial Accounting tally with Materials
Management, Assets Accounting, Controlling, and so on?)
A: All open items; All sub ledgers
1.2.4.1. Regroup Receivables/Payables
Questions:
Q: 1) Do you classify open vendor/customer items in the financial

statements according to short, medium, or long term receivables/payables?
Describe your procedure.
A: We need this
1.2.4.2. GR/IR Clearing Account Maintenance
Questions:
Q: 1) Do you show goods receipts without an invoice and invoices without

goods receipts separately in your balance sheet reporting?
A: Yes
25
1.2.4.3. Financial Statement Creation
Questions:
Q: 1) Do you create financial statements on a monthly, quarterly or yearly

basis?
A: Everyday
1.2.4.4. Periodic Reports
Questions:
Q: 1) Which periodic reports do you carry out in general ledger accounting?
Explanation: see subsidiary ledgers too.
A: IS, BS, CFS, Flash and monthly reports
Q: 2) What type of information flow do you have for the results of periodic
asset reporting?
A: Depreciation, additions, deletions, audit format GL reconciliation
Q: 3) What are the critical monthly, quarterly and annual reports that you
need for Asset Accounting?
A: Depreciation, additions, deletions, audit format GL reconciliation &

capitalization
Q: 4) Which kind of reports do you use to reconcile asset accounting with

the general ledger?
A: Manually done
Q: 5) Are there any particular reports you would like for low value assets?
A: Yes
Q: 6) Are there any particular reports you run for leased assets?
A: As of now there is no report
Q: 7) How do you create your inventory lists? Do you use barcodes?
A: Yes
26
Q: 8) By which organizational units (or combinations of units) are asset
reporting functions structured (for example, company, cost center etc)?
A: Company / Cost Centers
1.2.4.5. Carry Forward G/L Balances
Questions:
Q: 1) How many retained earnings accounts do you have?
A: ? Profit & Loss Account, General Reserve, Statutory Reserve, Voluntary

Reserve
1.2.5. Integration
Questions:
Q: 1) How should the areas asset accounting, overhead cost controlling,

materials management, payroll, and sales and distribution be integrated
with general ledger accounting?
Explanation: You should also give consideration to special account

assignments and document summarizations.
A: SAP integration acceptable
1.3. Accounts Payable

1.3.1. Vendor Down Payments
Questions:
Q: 1) In which cases do your vendors require you to make a payment prior

to the processing of an order or shipment?
Explanation: Comment for PS: Note that it is possible to schedule a down

payment in the invoicing plan for an externally processed or general costs
activity, or for an externally procured material component within the
project.
A: Advance payment upon issuing P.O.
27
Q: 2) Please describe the complete process currently in place for down
payments, including the postings that are generated.
Explanation: Comment for PS: Note that it is possible to schedule a down

payment in the invoicing plan for an externally processed or general costs
activity, or for an externally procured material component within the
project.
A: As per SOP
Q: 3) Do you plan on paying down payments with the automatic payment

program?
YES
Explanation: Comment for PS: The transfer posting of cash items is a

process that takes place at the end of the period. It must be carried out
before you can see the current cash items in the project.
A: [ ] Yes
[ ] No.
1.3.2. Invoices and Credit Memos
Questions:
Q: 1) What are your internal procedures and controls from the point of
invoice receipt to payment?
Explanation: Course of action for invoice verification without MM
A: Record of invoices received; record of invoices not received; receipt of

goods and services; billing as per order; approval authority, etc
1.3.2.1. Vendor Document Parking
Questions:
Q: 1) What is your procedure for parking and releasing invoices and

or/credit memos?
A: Authority levels
1.3.2.2. Invoice Receipt
Questions:
28
Q: 1) Which invoices that are not related to a purchase order do you
typically post?
A: Based on agreements; Government/ statutory payments
Q: 2) Describe any taxes that must be calculated on vendor transactions.
A: N/A
Q: 3) How do you handle cash discounts?
Explanation: Gross or net procedure?
A: When P.O. is issued, net procedure
Q: 4) Is your cash discount base net or gross?
Explanation: Taxes on sales/purchases Taxes on sales/purchases
A: Net
1.3.2.3. Vendor Credit Memo
Questions:
Q: 1) How do you process vendor credit memos?
Explanation: Clearing or disbursement?
A: We reduce from invoices due for regular suppliers; Others we insist on

payments
Questions:

accounts?
A: It should be traceable
Q: 2) Do you want do define a specific document type for reverse

documents?
A: Yes
29
Questions:

A: Yes ( Rent, Gas )
1.3.3. Vendor Account Analysis

1.3.3.1. Vendor Line Item Analysis
Questions:
Q: 1) Is there certain information that you wish to be able to display when

you view vendor postings online?
A: Account / name/ address/ dues/ received not paid
1.3.3.2. Balance Analysis
Questions:
Q: 1) Which online analysis options do you use?
A: Online analysis on vendor level not GL level
1.3.3.3. Vendor Account Evaluations
Questions:
Q: 1) Which evaluations do you need for vendors?
A: Order – supply – invoice receipt dates
1.3.4. Vendor Payments
Questions:
Q: 1) Which payment methods do you use (check, bank transfers, bills of

exchange, direct debit, etc.)?
A: Mainly bank transfers

Q: 2) How do you pay your domestic vendors (by check, bank transfer etc.)?
A: Both
Q: 3) How do you pay your employees (e.g. travel expenses)?

30
Explanation: Are you using the HR module? Are accounts managed for each
employee?
A: Bank transfer, cash and checks

We want to manage employee account
Q: 4) How do you handle partial payments to vendors?
A: N/A
Q: 5) Do you always issue a single payment for multiple invoices to the

same vendor? If not please specify the exceptions.
A: Yes
Q: 6) How do you handle payables to vendors that are also customers?
Explanation: Separate payment? Clearing?
A: ? Normally we don’t net off
Q: 7) How do you process credit memos from vendors?
Explanation: Clearing or payment?
A: We net of against invoices
Q: 8) How do you handle cash discounts?
Explanation: Gross or net procedure?
A: Net
Q: 12) Do you use pre numbered checks?
A: [x]Yes
[ ]No
Q: 13) How do you reconcile your check register (cleared checks)?
A: Manually done
Q: 14) How do you transfer your electronic payment file to the bank?
A:
31
1.3.4.1. Vendor Payment Request
Questions:
Q: 1) In which cases do your vendors require you to make payment before

the date of required payment on the invoice?
Explanation: Observe account determination for this special G/L

transaction.
A: Not normally
1.3.4.2. Release for Payment
Questions:
Q: 1) How do you release invoices that have been blocked for payment?
Explanation: Observe possible blocking reasons.
A: We need blocking option

1.3.4.3. Manual Outgoing Payments
Questions:
Q: 1) In what cases do you use manual payments to vendors?
A: In exceptional cases, when suppliers need payments very urgently
Q: 2) Do you print or hand-write the payment media (for example, debit

memo forms)?
A: Print
1.3.4.4. Automatic Outgoing Payments
Questions:
Q: 1) How do you post payments? Which G/L accounts are used? Which
additional account assignments (for example, cost centers) do you need for
bank postings, bank charges ac counts, cash discount accounts, and
exchange rate differences?
A: SAP standard settings OK
Q: 2) Do you wish to clear vendor invoices at the time of payment or at the

time the bank statement is posted?
32
Explanation: Payment method indicator: Selecting payment order and not
payment posting means that the payment program: does not post a payment
document does not clear the paid items. does not clear the paid items.
Instead, a payment order is created and saved. The information
contained therein can be used to clear the item at a later date.
contained therein can be used to clear the item at a later date. The
posting of the payment occurs with the account statement of the bank
and selection of the associated open items via entry of the payment
order. payment order. The paid items are locked until the payment is
posted. This means that they cannot be used in other clearing
transactions or further payment runs.
A: At the time of payment
Q: 3) Do you enter payments automatically based on an electronic bank

statement? Describe in detail how these payments are processed.
Explanation: Observe collection procedure, for example
A: Not done now
Q: 4) How often do you make automatic payments?
A: Daily
Q: 5) Which bank account(s) are used for payments? List the bank accounts
by payment method, by foreign currency, or any other criteria relevant for
bank selection.
Q: 6) How does your actual cash position influence the way you assign funds
to the different banks in the payment program?
Explanation: Maintenance of available amounts
A: For major payments, we have to check cash position
Q: 7) How do you handle bank charges?
Explanation: Perhaps define account determination
A: Manual Entry
1.3.4.5. Vendor Payment Medium Creation
33
Questions:
Q: 1) For which incoming payments do you create payment medium forms

(incoming bills of exchange, for example)?
A: N/A at present
Q: 2) Which incoming payments are made electronically?
A: N/A at present
Q: 3) Do you use your own number management for checks (check

management)?
0
A: [x]Yes
[ ]No
1.3.5. Account Clearing [AP]
Questions:
Q: 1) In which cases are open items cleared other than through payment
receipts?
Advance payment and partial payment.
Explanation: Note: With advance payments and offsetting, clearing has to

be done afterwards.
0
A:
Questions:
A: good received / BG
1.3.6. Interest Calculation [A/P]
Questions:
Q: 1) For which vendo00rs do you calculate interest?
A: no body now
1.3.6.1. Vendor Account Balance Interest Calculation
34
Questions:
Q: 1) Which interest rates do you use?
A: N/A now
Q: 2) How do you post interest charges?
A: N/A now
1.3.6.2. 00Calculation of Interest on Arrears – Vendors
N/A now
Questions:
Q: 1) After how many days do you calculate interest on overdue amounts?

0
A: N/A now
Q: 2) Which interest rates do you charge different vendor groups?
A: N/A now
Q: 3) How do you handle credit memos?
A: pay against vendor a/c
A: N/A now
1.3.7. Correspondence with Vendors

1.3.7.1. Correspondence with Vendors
Questions:
Q: 1) What correspondence (such as balance confirmation) and internal

evaluations (such as internal documents) do you create for your vendors?
Fax and email
Explanation: Correspondence is the written communication that is sent by

the company to vendors. Internal evaluations serve as the internal
documentation of business transactions with vendors.
000
A:
35
1.4. Accounts Receivable
1.4.1. Customer Down Payments
Questions:
Q: 1) In which cases do you require your customers to make a payment prior

to the processing an invoice or delivery?
Urea local sales

Explanation: Comment for PS: It is possible to schedule customer down
payments in the project billing plan in WBS elements that have the
indicator "Billing element".
00
A:
Q: 2) What is the complete process for down payments, including the

postings that are generated?
0
Explanation: Comment for PS: Note that it is possible to configure the use
of milestones such that a down payment request is automatically triggered.
When the milestone is completed, the request is generated by the
settlement run.
A: SAP standard settings accetable
Q: 3) Do you plan on paying down payments with the automatic payment

program? (direct debit)
Explanation: Comment for PS: The transfer posting of cash items is a

process that takes place at the end of the period. It must be carried out
b0efore you can see the current cash items in the project.
A: [ x ]Yes
[ ]No
Q: 4) Do you plan on dunning down payments request?
A: [ x]Yes
[ ]No
1.4.1.1. Customer Down Payment
Questions:
0
Q: 1) How do you process customer down payments?
36
N/A now
Explanation: Identification for separate reconciliation accounts
A: N/A now
Q: 2) How are these down payments cleared with the customer account?
A: N/A now
Q: 3) Are some customer down payments related to projects?
A0: Not generally

1.4.2. Invoices and Credit Memos
1.4.2.1. Customer Document Parking
Questions:
Q: 1) Do customer invoices require any type of approval before they are

posted?
A: yes
Q: 2) What is your procedure for parking and releasing invoices and

or/credit memos?
A: work flow
1.4.2.2. Outgoing Invoice
Questions:
Q: 1) Which document types and document number ranges do you use?

0
A: SAP
Q: 2) Can you use templates for some of these invoices?
yes
Explanation: Reference documents, for example
A: yes
1.4.2.3. Customer Credit Memo
Questions:
Q0: 1) How do you process customer credit memos?

---
37
Explanation: Clearing or disbursement?
A: Adjust to account
Questions:

accounts?
A: yes
0
Q: 2) Do you want do define a specific document type for reverse
documents?
A: Yes
00
Questions:

A: Yes
1.4.3. Account Analysis [A/R]

1.4.3.1. Customer Line Item Analysis
Questions:
Q: 1) Is there any p0articular information that you wish to represent when

representing customer postings online?
A: [ x ]Yes.
[ ]No
1.4.3.2. Balance Analysis
Questions:
Q: 1) Which online analysis options do you use?
A: open item ageing

1.4.3.3. 0Credit Management Analysis
38
Questions:
Q: 1) Which procedures do you have in place to control your customers'

credit limits?
N/A now
Explanation: Time of credit limit check; Relevant documents for the credit
limit check; Consequences of credit limit check (Notification of person
responsible, locking of documents and so on)
A: ageing
1.4.3.4. Customer Evaluations
0
Questions:
Q: 1) Which evaluations do you need for customers?

Usual normal SAP settings
A:
1.4.4. 0Customer Payments
Questions:
Q: 1) Which payment procedure do your customers use? (Check, bank

transfer, bill of exchange, debit memo procedure)
A: Bank transfer - now
Q: 2) How do you handle payment differences?
Explanation: For example, charging off, creating residual items, partial

payment
0
A: Transfer to account
Q: 3) Are payment differences posted automatically?
A: N/A now
Q: 4) Do your customers provide reason codes for discrepancies in

payments?
A: N/A now
1.4.4.1. Payment Advice Note Processing
39
Questions:0
Q: 1) Do you receive payment advices from your customers?
A: [x ]Yes
[ ]No
Q: 2) Do you enter payment advices manually prior to applying the

payments?
A: [ x ]Yes
[ ]No
1.4.4.2. 0Release for Payment
Questions:
Q: 1) How do you release invoices that have been blocked for payment?
Explanation: Observe possible blocking reasons / workflow
A: appropriate authority sanctions
1.4.4.3. Manual Incoming Payments
Questions:
Q: 1) Which procedure do you use to enter customer payments?
Explanation: Time of customer payment, time of customer payment

notice/account statement
A: On receipt of money at our banks

Q: 2) Which payment procedure do your customers use? (Check, bank
transfer, bill of exchange, debit memo procedure)
A: Bank transfers at present
Q: 3) Do you print or hand-write the payment media (for example, debit

memo forms)?
A: Yes
1.4.4.4. Automatic Incoming Payments
Questions:
40
Q: 1) How do you post payments? Which G/L accounts are used? Which
addition00al account assignments (for example, cost centers) do you need
for bank postings, bank charges ac counts, cash discount accounts, and
exchange rate differences?
A: SAP standard
Q: 2) Do you process automatic payments for your customers, such as direct

debits and bills of exchange? Please describe in detail how these payments
are processed.
A: N/A now
Q: 3) Do you enter payments automatically based on an electronic bank

statement? Describe in detail how these payments are processed.
Explanation: Observe collection procedure, for example
A: Not now
1.4.4.5. Customer Payment Medium Creation
Questions:
Q: 1) For which incoming payments do you create payment medium forms

(incoming bills of exchange, for example)?
A: N/A
Bill of Exchange Receivable
Questions:
Q: 1) Do your customers use bills of exchange to pay? Describe this

procedure in detail.
A: No
1.4.4.6. Manual Payment by Bill of Exchange
Questions:
Q: 1) If you process manual payments, do you want the option of directly

entering a check or a bill of exchange?
A: N/A now
41
1.4.4.7. Bill of Exchange Usage
Questions:
Q: 1) Do you intend to issue bills of exchange to customers?
A: no
1.4.5. Account Clearing [AR]
Questions:
Q: 1) In which cases are open items cleared other than through payment
receipts?
Explanation: Note: With advance payments and offsetting, clearing has to

be done afterwards.
A: Invoice cancellations
Questions:
A: Against receipts
1.4.6. Dunning Notice

1.4.6.1. Automatic Dunning
Questions:
Q: 1) After how many days do you intend to issue a dunning notice?
A: first day after due date ( daily) , weekly for marketing (internally)
Q: 2) What is the dunning frequency?
A: weekly external – alternate day internal
Q: 3) Do you dun various customer groups at different intervals?
A: yes
Q: 4) Which types of dunning do you use?
42
A: correspondence to customers
Q: 5) How many dunning levels do you have?
A: 4
Q: 6) Which organizational units are responsible for dunning (for example,
company code, division)?
A: Finance and marketing
Q: 7) Do you calculate dunning interest or charge a dunning fee?
A: yes
Q: 8) In which cases do you dun a vendor?

Advance payment / excess payment / on a quarterly / yearly basis
A: Advance payment - monthly basis// excess payment – weekly basis
1.4.7. Interest Calculation [A/R]

1.4.7.1. Customer Account Balance Interest Calculation
Questions:
Q: 1) For which customers do you calculate interest on balances?
A: N/A now
A: N/A now
A: N/A now
Q: 4) What types of notices do you send to your customers and how often?
A: N/A now
1.4.7.2. Calculation of Interest on Arrears - Customers
Questions:
Q: 1) After how many days do you calculate interest on overdue amounts?
43
A: N/A now
Q: 2) Which interest rates do you apply to your different groups of

cu00000stomers?
A: N/A now
Q: 3) How do you handle credit memos?
A: N/A now
A: N/A now
Q: 5) What types of notices do you send to your customers and how often?
A0: N/A now
1.4.8. Correspondence with Customers

1.4.8.1. Correspondence with Customers
Questions:
0
Q: 1) What sort of correspondence (account statements, balance
confirmations, for example) and internal evaluations (internal documents,
account balances, open item lists, for example) do you create for your
customers?
Explanation: Correspondence is the written communication that is sent by

the company to customers. Internal evaluations serve as the internal
documentation of business transactions with customers.
A: Standard SAP features
1.5. Bank Accounting

1.5.1. 0Incomings
1.5.1.1. Cash Journal
Questions:
44
Q: 1) How do you manage incoming cash?
A: Refer to discussions with Treasurer
Q: 2) For which business transactions are incoming cash journal postings

made?
A: Scrap sales/ miscellaneous cash sales?
00
Q: 3) How are these business transactions posted?
A: SAP settings
1.5.1.2. Manual Account Statement
Questions:
Q: 1) What specific information do your bank statements contain (for

example, invoice numbers)?
A: Normal – no invoice numbers
Q: 2) Does you house bank transfer business transaction codes with the
ba0nk statements to help you classify the postings?
A: Not now
Q: 3) Outline the posting steps for typical bank statement postings.
A0: Normal Sap settings
Q: 4) Which payment methods do you process using the FI payment

program?
A: ?
Q: 5) Do you process these payment methods via separate clearing

accounts?
A: ?
Q: 6) Do you want to distinguish between posting documents for manual

and electronic bank statements for accounting and reporting purposes?
0
A: Yes
1.5.1.3. Check Deposit Transaction
45
Questions:
Q: 1) How many checks do you present to your house banks per day?
A: About 100 per week
Q: 2) Do you enter checks from customers manually or electronically?
A: Manually
0
Q: 3) What information given by the check issuer can be used to allocate
items (check number, invoice number)?
A: invoice number
Q: 4) Sketch the posting steps for check deposits (are checks posted
directly to customer accounts or via clearing accounts)?
A: Via clearing accounts
Q: 5) Do you want to separate check postings for general ledger accounting

and sub ledger accounting?
0
A: SAP settings OK
1.5.1.4. Bill of Exchange Presentation (Debit)
Questions:
Q: 1) Do you want to monitor the bills of exchange presented?
A: NA
1.5.1.5. Cash Journal
Questions:
Q: 1) How do you manage incoming cash?
A: Normal cash planning
Q: 2) For which business transactions are incoming cash journal postings

made?
A: ?
Q: 3) How are these business transactions posted?

46
A:?
1.5.2. Check Management

1.5.2.1. Manage Check Balance
Questions:
Q: 1) Do you use pre numbered checks, or do you assign your checks

numbers from self-defined number ranges?
A: [X ]Yes
[ ]No
1.5.3. Account Balance Interest Calculation

1.5.3.1. Account Balance Interest Calculation
Questions:
Q: 1) For which G/L accounts do you calculate interest on balances? Give a

brief description.
A: Not done now / bank loan account?
A: Variable
A: N/A
Q: 4) Do you combine the debit and credit balances of different accounts

for interest calculation?
Explanation: Cash pooling involves the fictitious combination of debit and

credit balances on accounts. Interest is calculated on the pooled overall
balance.
A: N/A
1.6. Special Purpose Ledger
47
2. Asset Accounting
Questions:
Q: 1) Are any of your asset values managed in a foreign currency? If so,

specify the relevant countries and currencies.
A: no now
Q: 2) Does the fiscal year for asset accounting correspond to the calendar
year? If not, specify the start and end dates of your fiscal year.
A: yes
Q: 3) Is your enterprise currently using a shortened fiscal year, or you have

used a shortened fiscal year in the past, for which you want the R/3 System
to recalculate depreciation as part of the asset data transfer?
A: [ ]Yes
[ x]No
Q: 4) Is your enterprise required to calculate mid-month or mid-year

depreciation?
A: [ X ]Yes mid year review

[ ]No
2.1. Handling Fixed Assets

2.1.1. Asset Maintenance
2.1.1.1. Creation of Master Record for Tangible Assets
Questions:
Q: 1) Do you need to manage and depreciate certain parts of your asset

portfolio in the form of group assets?
A: yes
Q: 2) Who is responsible for creating asset master records? Who provides

which information?
A: ECO, IO, MA
Q: 3) Which organizational units and/or which functional areas have

authorization for creating or displaying asset master records?
48
A: ?
Q: 4) The asset master record can be divided up into tab pages. How
should the asset master record field groups be ordered for your
organization?
SAP possible
Explanation: Customizing layout of screen layout and assignment to asset

class.
A: SAP standard
2.1.1.2. Asset Master Record Change
Questions:
Q: 1) In your enterprise, who has authorization to change asset master

records? For which areas? Are these authorized individuals different from
those who create the master records?
A: no same people
Q: 2) How often is it necessary to change your asset master records? Which

parts of the asset master record are most often affected?
A: frequently
Q: 3) Are there certain asset master record fields that need to be

protected against changes? If so, which fields?
yes
Explanation: It is possible to define non-changeable display fields in the

asset master record screen layout.
A:
2.1.1.3. Mass Change
Questions:
Q: 1) In your enterprise, who has authorization to change a large number

of assets simultaneously?
A: MA CFA FM
49
Q: 2) Do you need to make changes to a large number of assets
simultaneously?
A: [X ]Yes
[ ]No
Q: 3) If so, under what circumstances? Please describe.
A: Occasionally
2.1.2. Receipts
Questions:
Q: 1) Does your organization have a specific amount, above which

purchases are to be capitalized as fixed assets? If so, what is this amount?
Bd 1000
Explanation: Amount limit for low-value assets
A: low value amount
2.1.2.1. Direct Acquisition of Internal Activity
Questions:
Q: 1) Are some services (or internal activities) capitalized (such as legal

costs or consultancy charges)?
A: yes
Q: 2) Do you activate costs for internal activity using: - Production order -

Investment measure - Asset under construction - Direct capitalization -
Other?
A: yes
Q: 3) For reporting, would you like separate capitalized internal activities

using different transaction types?
A: yes
2.1.2.2. Processing of Asset Acquisition
Questions:
50
Q: 1) Describe the information flow for asset acquisitions in your
enterprise.
A: PO then invoice
Q: 2) Describe your capital procurement requirements.
A: Budget proposed with commercial elevation - budget approval and PO
Q: 3) What types of acquisition occur in your enterprise?
yes
Explanation: Acquisition integrated via invoice receipt/goods receipt
(Logistics - Materials Management) Acquisition via goods receipt - accounts
payable accounting Acquisition with automatic clearing account offsetting
entry
A: net booking
Q: 4) Are asset acquisitions posted on a net basis (deducting any discounts)

or as a gross amount (discounts are deducted only on payment)?
Explanation: Document type settings: Net document type indicator
A: Net basis
Q: 5) Do you want to show acquisitions to certain depreciation areas

differently than you do in the book depreciation area (for example, to fulfill
certain cost-accounting, tax or group requirements)?
A: no now
Q: 6) Do you post goods receipt to assets valuated or non-valuated?
A: yes
Q: 7) Do you want down payments for assets to be shown separately?
A: Information required
Q: 8) If using asset sub-numbering, do you want to permit asset

acquisitions only to the main number in the year of capitalization, and post
all later acquisitions to sub-numbers?
A: yes
51
Q: 9) Do you keep a record of costs using acquisitions to the asset under
construction? yes
A: Yes
Q: 10) Do you plan and budget for capital investments in your enterprise?
Should assets that are capitalized directly also be included in the planning
and budgeting processes?
A: yes
Q: 11) Which is the procedure from invoice receipt to posting of

capitalization? Outline the different steps.
A: inv then CWIP then capitalization
2.1.2.3. Subsequent Acquisition
Questions:
Q: 1) Under what circumstances do you intend to post subsequent

acquisitions to previously capitalized fixed assets?
A: major addition, replacement of major parts impairment
2.1.3. Depreciation
2.1.3.1. Creation of Reserves from Gain from Asset
Retirement
Questions:
Q: 1) Under what circumstances do you intend to create reserves from

profits realized on the sale of fixed assets?
A: N/A now
2.1.3.2. Reserves Carry forward
Questions:
Q: 1) Do you create reserves for fixed assets?
A: [ ]Yes
[ x]No
Q: 2) If so, provide examples. How do you post? What are the reasons?
52
A: NA
2.1.3.3. Depreciation Processing
Questions:
Q: 1) What are the methods of depreciation that you are currently using?
A: straight line for co and
Q: 2) Do you calculate depreciation values to the day?
A: no
Q: 3) In certain cases do you change over from declining-balance

depreciation to straight-line depreciation? If so, when?
A: N/A now
Q: 4) Do you want to allow negative depreciation for certain assets or

categories of assets? If so, please specify.
A: N/A now
Q: 5) Do you distinguish between a fixed and a variable depreciation

portion?
A: N/A now
Q: 6) How do you handle the period control for depreciation values?
A: monthly
2.1.3.4. Manual Depreciation Planning
Questions:
Q: 1) In which cases do you need to start depreciation manually?
A: no
Q: 2) How often do you use the manual depreciation function?
A: N/A now
53
Q: 3) When do you use unplanned depreciation?
We need
A:
2.1.3.5. Depreciation Posting
Questions:
Q: 1) Is it necessary, from a business point of view, to post depreciation

directly to cost accounting? If so, which receivers are to be debited (for
example, cost centers, internal orders)?
A: cost centers
Q: 2) How often do you intend to post depreciation to the general ledger

and to cost accounting?
A: monthly
Q: 3) Do you post depreciation to assets under construction?
A: no
Q: 4) To which account(s) is depreciation posted?
A: list
Q: 5) Do you want to show interest only in reports, or do you want to post

interest directly to cost accounting?
A: yes
2.1.3.6. Unit-of-Production Depreciation
Questions:
Q: 1) Do you use the unit of production method for certain assets? If so,
please specify.
A: not now
2.1.4. Business Transactions

2.1.4.1. Settlement of Asset under Construction
Questions:
54
Q: 1) Do you wish to manage "Assets under construction" in Asset
Accounting? If yes, describe the capitalization process.
Yes it will flow from PS

Explanation: 1. Classic asset under construction or investment measure
A:
Q: 2) What is the timing for the capitalization process?
A: immediately upon transfer to use
Q: 3) With respect to capitalization, are you bound by specific laws?
A: [ ]Yes
[ x]No
Q: 4) Is it possible that an asset under construction is capitalized as a low

value asset?
A: not possible now
Q: 5) Do you intend to use summary settlement or line item settlement for

assets under construction?
A: facility
Q: 6) To which receiver(s) do you settle assets under construction?
A: asset
Q: 7) Do you use partial capitalization?
A: [x ]Yes
[ ]No
Q: 8) What kind of information flow do you have for when an investment

measure is completed and the asset under construction is ready for
settlement to the final asset?
A: technical completion
Q: 9) Do you display down payments to assets under construction

separately?
A: [ x]Yes
55
[ ]No
Q: 10) What kind of information flow do you have for the settlement of
down payments? BG
A: BG related information
2.1.4.2. Post-capitalization
Questions:
Q: 1) What circumstances make post-capitalization necessary in your

enterprise? One
amount on the asset should have a different depreciation start date than
the original asset -
Explanation: For example: - Someone neglected to capitalize an asset (if

so, for what reason?) - One amount on the asset should have a different
depreciation start date than the original asset - Other
A: delays in capitalization should have facility to capitalize with

retrospective dates
Q: 2) How do you intend to post post-capitalization: - Gross, that is, with

historical values (APC and depreciation)- Net, that is, depreciation begins
on the posting date using the net book value.
A: no
Q: 3) Do you want to post to a separate sub-number for post-capitalization?
A: Not required
2.1.4.3. Write-up
Questions:
Q: 1) Do the value of your assets appreciate, and if so, do your ledgers

need to be adjusted?
A: It is possible
Q: 2) Describe the reasons for a fixed asset revaluation, the process used,
and give examples of the assets which are to be revaluated.
A: If there is one, it will be based on professional technical valuation and

done periodically
2.1.4.4. Reposting
56
Questions:
Q: 1) Is it necessary to transfer assets from one company code to another?
N/A now
Explanation: Settings for company code transfer
A:
Q: 2) Do you sometimes split an asset into one or more new assets? If so,
please specify.
A: N/A now
Q: 3) Do you transfer between different asset classes? Give examples.
A: N/A now
Q: 4) Is the changing of an assigned cost center or a business area, for

example, a reason for a transfer posting?
A: N/A now
Q: 5) How do you find out about necessary transfer postings in asset

accounting?
A: N/A now
2.1.5. Specific Valuations

2.1.5.1. Closing of Insurance Contract
Questions:
Q: 1) Do you want to display insurance values for your fixed or leased

assets?
A: [x ]Yes
[ ]No
Q: 2) With which insurance companies do you have insurance agreements?
57
A: BNI
Q: 3) Are your low value assets part of an insurance contract?
A: [ x ]Yes
[ ]No
Q: 4) What is the basis for the calculation of an asset's insurable value?
A: expert valuation
Q: 5) Do you index your insurance values?
A: sometime
Q: 6) Do you intend to use a separate asset valuation area for your

insurance values?
A: no
Q: 7) Is there any interaction between insurance of assets and your leasing

agreements?
A: no
Q: 8) How do you wish to make your insurance payments?
A: normal PO
2.1.5.2. Revaluation
Questions:
Q: 1) Do you carry out fixed asset revaluations? If so, give examples
A: yes / bank with account
2.1.6. Group Requirements

2.1.6.1. Transfer Within a Client
Questions:
Q: 1) What are your enterprise and/or statutory requirements for

transferring assets to associated companies?
58
A: N/A now
2.1.6.2. Creation of Master Record for Tangible Assets
Questions:
Q: 1) Do you need to manage and depreciate certain parts of your asset

portfolio in the form of group assets?
A: N/A now
Q: 2) Who is responsible for creating asset maser records? Who provides

which information?
A: PA
Q: 3) Which organizational units and/or which functional areas have

authorization for creating or displaying asset master records?
A: Finance
Q: 4) The asset master record can be divided up into tab pages. How
should the asset master record field groups be ordered for your
organization?
SAP order
Explanation: Customizing layout of screen layout and assignment to asset
class.
A:
2.1.7. Retirements
2.1.7.1. Retirement
Questions:
Q: 1) How and when is asset accounting informed of the retirement of an

asset?
A: when replacing asset
Q: 2) Do you sell or transfer assets to affiliated/associated companies?
A: [ ]Yes
59
[ ]No N/A now
Q: 3) How do you process retirement of a low value asset (e.g. retirement

with zero value; retirement with revenue; account assignment for
retirement with revenue)?
A: SAP procedure will be followed
Q: 4) Who issues invoices for asset sales?
A: Finance
2.1.7.2. Mass Retirement
Questions:
Q: 1) When retiring assets, is there ever a need to retire a large number of

assets at the same time?
A: Yes
Q: 2) If yes, how many assets are normally concerned? Please provide an

example with documents.
A: Very rare
2.1.8. Closing Operations [Asset Accounting]
Questions:
Q: 1) What activities are included in the month-end process for asset

accounting?
A: Depreciation entry, reconciliation of fixed assets with GL
Q: 2) Which internal and external asset valuations belong to month-end

closing process? Please provide a sample of all required valuations.
A: N/A
Q: 3) What activities are included in the year-end closing process for asset
accounting?
A: Depreciation entry, reconciliation of fixed assets with GL
60
Q: 4) Which internal and external asset valuations belong to year-end
A: N/A
2.1.8.1. Multiple Valuations
Questions:
Q: 1) Do you have parallel valuation for your asset, e.g. for group
valuation, for cost accounting purposes or for legal reasons?
A: No, now
Q: 2) Do you have to valuate your assets in different currencies?
A: Not necessary

balance sheet) and tax values (for a tax balance sheet)?
A: No
2.1.8.2. Preparations for Year-End Closing in Asset

Management
Questions:
A: December 31
Q: 2) Do you run the year-end closing process in asset accounting separate

from general ledger?
A: No
Q: 3) Are leased assets treated like any other fixed assets in year-end
closing?
A: N/A now
2.1.8.3. Depreciation Simulation / Forecast
Questions:
61
Q: 1) Do you simulate retirements of low value assets in your asset history
sheet?
A: Yes
Q: 2) Do you wish to use different methods of valuation or different

depreciation methods in your simulation? If so please specify.
A: Mainly Straight Line Method; but options can be there for projection.
Questions:

A: MA / FM

simultaneously?
A: [x]Yes
[ ]No
A: When a revaluation on balance life/ replacement value is done

2.1.8.5. Recalculation of Depreciation
Questions:
Q: 1) Does it sometimes occur that you need to change depreciation

methods or calculation rules during the course of a fiscal year? If so, please
provide an example and reason why a change was necessary).
A: Yes; for catalysts, mainly
Q: 2) Does it sometimes occur that you introduce a new depreciation

valuation area during the course of a fiscal year? If so, please provide an
example and reason why a new valuation area was necessary).
A: Provision should be there
62
2.1.8.6. Depreciation posting
Questions:

A: Yes

A: Monthly
A: No
A: List Given

A: To be posted
2.1.8.7. Carry Out Year-End Closing in Asset Management
Questions:
Q: 1) How do you conduct the physical inventory for fixed assets (e.g.
manually, using barcode scanner)?
A: Random selection / manual verification

Q: 2) Who is responsible for the physical inventory of the fixed assets?
A: PA
Q: 3) What is the relation between the inventory number of an asset and

the number of the asset master record?
A: NA
Q: 4) Do you create inventory lists using the SAP R/3 System, or using a
non-SAP system?
63
A: NO
Questions:
Explanation: See subsidiary ledgers too.
A: Monthly management report
asset reporting?
A: ?
A: Depreciation, additions, deletions & audit schedule

the general ledger?
A: We want to see the reconciliation in the screen

A: Department wise reports for maintaining physical control
A: Yes

A: N/A
2.2. Handling of Leased Assets
Questions:
Q: 1) What kind of leasing agreements do you normally make? Operating

leases (not necessarily shown in Asset Accounting) or Capital Leases (Asset
capitalized)?
64
A: N/A
2.2.1. Asset Maintenance

2.2.1.1. Asset Master Record Change
Questions:
Q: 1) Do you transfer your assets from one legal entity to another?
A: [ ]Yes
[x]No
Q: 2) If not transferred between legal entities, do you create a new master

record when location changes?
A: No
Q: 3) Describe possible ways of processing changes in location. What

procedures are currently in place?
A: We want to record
Q: 4) Does changing of location apply to low value assets?
A: [x]Yes
[ ]No
Questions:

A: MA/FM

simultaneously?
A: [x]Yes
[ ] No
A: Time dependant data

65
2.2.2. Receipts
2.2.2.1. Acquisition of Leased Asset
Questions:
Q: 1) Who is responsible for the acquisition of a leased asset? Who will

negotiate the leasing agreement?
A: N/A now
Q: 2) Describe the process for the acquisition of a leased asset, from the
purchase order to capitalization in Asset Accounting.
A: N/A now
2.2.3. Depreciation
2.2.3.1. Depreciation Processing
Questions:
Q: 1) What are the methods of depreciation that you are currently using?
A: Straight Line Method
Q: 2) Which depreciation method is used particularly for leased assets?
A: N/A
Q: 3) Do you calculate depreciation values to the day?
A: Monthly
Q: 4) In certain cases do you change over from a declining-balance
depreciation to straight-line depreciation? If so, when?
A: N/A
Q: 5) Do you want to allow negative depreciation for certain assets or

categories of assets? If so, please specify.
A: Not now
Q: 6) Do you distinguish between a fixed and a variable depreciation

portion?
A: No
Q: 7) How do you handle the period control for depreciation values?

66
A: Manual
Questions:

A: Yes

A: Monthly
A: No
A: List given

A: Post to Cost Accounting
2.2.4. Business Transactions

2.2.4.1. Transfer Leased Asset
Questions:
Q: 1) Do you transfer leased assets between companies?
A: [ ]Yes
[x] No
Q: 2) Would a transfer of a leased asset affect the leasing agreement? If

so, please describe.
A: N/A
2.2.4.2. Change in a Leasing Agreement N/A
67
Questions:
Q: 1) How often are changes in a leasing agreement necessary?
A: N/A
Q: 2) What type of changes are most frequent? Provide examples.
A: N/A
Q: 3) In cases where changes to a leasing agreement are necessary, how

many assets would be affected?
A: N/A
Q: 4) Does a change of location affect your leasing agreement? In what

way?
N/A
A:
Q: 5) What is the information flow in your enterprise regarding a change in

asset location or a change of an asset to a different organizational unit?
A: N/A
Lease Payment N/A
Questions:
Q: 1) Describe the payment conditions of your leasing agreements.

Differentiate if necessary between different kinds of agreements.
A: N/A
Q: 2) How often are your leasing payments due?
A: N/A
2.2.5. Specific Valuations

2.2.5.1. Closing of Insurance Contract
Questions:
Q: 1) Do you want to display insurance values for your fixed or leased

assets?
A: [x]Yes
[ ]No
68
Q: 2) With which insurance companies do you have insurance agreements?
A: BNI
Q: 3) Are your low value assets part of an insurance contract?
A: [x]Yes
[ ]No
Q: 4) What is the basis for the calculation of an asset's insurable value?
A: External assessment
Q: 5) Do you index your insurance values?
A: Sometimes
Q: 6) Do you intend to use a separate asset valuation area for your

insurance values?
A: No
Q: 7) Is there any interaction between insurance of assets and your leasing

agreements?
A: N/A
Q: 8) How do you wish to make your insurance payments?
A: Separately through AP
2.2.6. Retirements
2.2.6.1. Retirement of Leased Asset N/A
Questions:
Q: 1) What are the reasons for retiring a leased asset?
A: N/A
Q: 2) What is your process for retiring leased assets? Please describe the
postings.
A: N/A
69
.
Q: 3) Do you normally buy leased assets after expiration of the leasing
contract or do you return them to the lessor?
A: N/A
2.2.7. Closing Operations
Questions:
Q: 1) What activities are included in the month-end process for asset

accounting?
A: SAP
Q: 2) Which internal and external asset valuations belong to month-end

A: SAP
Q: 3) What activities are included in the year-end closing process for asset
accounting?
A: SAP
Q: 4) Which internal and external asset valuations belong to year-end

A: SAP
2.2.7.1. Multiple Valuations
Questions:
Q: 1) Do you have parallel valuation for your asset, e.g. for group
valuation, for cost accounting purposes or for legal reasons?
A: SAP
Q: 2) Do you have to valuate your assets in different currencies?
A: SAP

balance sheet) and tax values (for a tax balance sheet)?
A: SAP
70
2.2.7.2. Preparations for Year-End Closing in Asset
Management
Questions:
A: 31st December
Q: 2) Do you run the year-end closing process in asset accounting separate

from general ledger?
A: Yes, now
Q: 3) Are leased assets treated like any other fixed assets in year-end
closing?
A: NA
2.2.7.3. Depreciation Simulation / Forecast
Questions:
Q: 1) Do you include planned capital investments in addition to capitalized

assets when forecasting depreciation?
A: [X ]Yes
[ ]No
Q: 2) Describe the process for distributing planned depreciation. For

example, do you distribute based on asset class, cost centers or estimate
the percentage depreciated?
A: Yes
Q: 3) Do you simulate retirements of low value assets in your asset history

sheet?
A: Yes
Q: 4) Do you wish to use different methods of valuation or different

depreciation methods in your simulation? If so please specify.
A: Yes
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Q: 5) Do you include additional asset transactions in the simulation? If so,
which transactions are relevant?
A: NA
Questions:

A: MA/FM

simultaneously?
A: [ X ]Yes
[ ]No
A: Revaluation of life/ values
2.2.7.5. Recalculation of Depreciation
Questions:
Q: 1) Does it sometimes occur that you need to change depreciation

methods or calculation rules during the course of a fiscal year? If so, please
provide an example and reason why a change was necessary).
A: No
Q: 2) Does it sometimes occur that you introduce a new depreciation

valuation area during the course of a fiscal year? If so, please provide an
example and reason why a new valuation area was necessary).
A: Normally not
Questions:

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A: No

A: Monthly
A: No
A: List given

A: Post to const accounting also

2.2.7.7. Carry Out Year-End Closing in Asset Management
Questions:
Q: 1) How do you conduct the physical inventory for fixed assets (e.g.
manually, using barcode scanner)?
A: Manually using the labels
Q: 2) Who is responsible for the physical inventory of the fixed assets?
A: Individual department managers
Q: 3) What is the relation between the inventory number of an asset and

the number of the asset master record?
A: NA
Q: 4) Do you create inventory lists using the SAP R/3 System, or using a
non-SAP system?
A: SAP system
Questions:
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Explanation: see subsidiary ledgers too.
A: Normal financials, management reports on performance
asset reporting?
A: ?
A: Standard reports on additions, deletions, depreciation, audit schedule,

etc

the general ledger?
A: Audit schedule reconciling GL and assets accounting
A: Location-wise, line items for controlling
Q: 6) Are there any particular reports you run for leased assets?
A: NA
A: Yes

A: Company/ cost centers
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Business Blueprint
CONTROLLING
BALCO
BAHRAIN
Created by:
Date of creation:
Changed by:
Date of the last changes:
Version:
_______________ ______________________ ______________________
Sign Off Date Signature Customer Signature Consulting

75
D. Organization
1. Cross-Application/Central Organizational Units

1.1. Controlling Area
Questions:
Q: 1) Note on controlling area:
Explanation: OSS note 107293: Decision criteria for or against cross-company code cost
accounting.
A: Controlling Area with Cross company code
Q: 2) Are you using one centralized controlling system or do you follow a decentralized
approach with several independent controlling systems?
Explanation: Are you using one centralized controlling system (system from an
organizational viewpoint) or do you follow a decentralized approach with several
independent controlling systems? (Decentralized means that, from a management
viewpoint, your organization is considered as independent entities)
A: Yes
Q: 3) Provided that company codes use the same chart of accounts and fiscal year
variant: Which company code(s) do you want to assign to your controlling area(s)?
A: Company code BALCO is assigned to Controlling Area BALCO
Q: 4) If you have multiple controlling areas: Do you intend to have management charge-
outs (allocations) across those controlling areas?
A: NA
Q: 5) If you wish to have unified Controlling, which currency or currencies are you
planning to use?
Explanation: When using transfer prices, the controlling area currency 10 (= company code
currency) or 30 (=group currency) must be used.
A: Group Currency, BHD
Q: 6) Which chart of accounts do you want to use in your controlling area?
76
A: BALCO
1.2. Profit Center

Questions:
Q: 1) Which criteria do you use for dividing your organization into internal areas of
responsibility?
Explanation: In other words, do you need to report on profit and loss data together with
balance sheet items for each strategic business unit (SBU)?
A: Product wise – Ammonia, Urea, Methanol, Utilities, Production Overheads and

Corporate overheads (inclusive of Marketing)
Q: 2) Do you want to structure your profit center accounting using the cost-of-sales
method (revenue minus cost-of-sales), or using period accounting (all revenues minus all
costs incurred in the period +/- inventory changes)?
Explanation: Note: If you require the cost-of-sales accounting method, you need to use the
functional areas.
A: NA, Period Accounting. The report required for getting the cost of sales accounting
would be met with either ABAP or BIW reports. It would be based on the profit center and
cost center accounting sub-modules.
Q: 3) Can you make unique profit center assignments for the following master data:
material/plant, cost center, sales order item, PSP elements, cost objects, internal orders
etc.?
A: Yes
Q: 4) As well as the "actual" profit centers, do you use any other profit center, which
provides services for various other profit centers (a service profit center)?
A: Production overheads and Corporate overheads would be as Profit Center other than
Products
Q: 5) If you require internal views for your organization's profits other than those in the
profit center hierarchy, specify additional groups/hierarchies.
A: NA
Q: 6) Do you want Consolidation (EC-CS) to be based on Profit Center Accounting

(management-oriented consolidation)?
A: NA
77
Q: 7) Do you want to use a unified, integrated user layout for the maintenance of your
enterprise organization in the SAP system? is there a serial number to
identify each piece of equipment from your production department and or
Explanation: The enterprise organization developed from the HR organizational structure.

Accounting-specific functions and organizational units were added to it. The following
reports are currently integrated in the enterprise organization: - HR organizational
structure - cost center standard hierarchy - profit center standard hierarchy In this way,
the enterprise organization allows you to view the company from the view of: -
responsibility for personnel - responsibility for costs - responsibility for revenues
A: To be discussed with HR
Q: 8) Can the structure of your Profit Center (standard hierarchy) be directly derived
from the enterprise organization?
A: To be discussed with HR
1.3. Operating Concern

Questions:
Q: 1) Are you using one central profitability controlling system (system from an
organizational viewpoint) or do you follow a decentralized approach with several
independent profitability controlling systems?
Explanation: Note: This means that different enterprise branches are independent of each
other, which does not enable you to analyze their results usefully.
A: One Profitability controlling system. The idea of the operating concern is to get
segmental reports other than the product-wise for eg., you can derive profitability for
customers, regions etc.,
Q: 2) In SAP the operating concern is an organizational unit that spans one or more
controlling areas. Describe which controlling area(s) you want to assign to your Operating
Concern(s)!
A: Controlling Area BALCO would be assigned to Operating Concern BALCO
Q: 3) What currency should be used for the operating concern? Do you require additional
evaluations in the company code currencies that correspond to FI?
Explanation: If you work with countries whose currencies are liable to extreme exchange
rate fluctuations, your data should be updated in company code currency.
A: [ ]Yes
[ ]No
Additional currency USD is required other than the BHD.
78
E. Master Data
1. Revenue and Cost Controlling
1.1. Overhead Cost Controlling
1.1.1. Cost Element
1.1.1.1. Primary Cost Element
Questions:
Q: 1) Define primary cost elements based on the definition of the chart of account.
A: List enclosed, Yes based on BALCO Charts of Accounts
Q: 2) Reserve a number range in the chart of accounts for the definition of CO-specific
accounts/primary cost elements: which additional primary cost elements do you need (such
as for accruals)?
A: The number range would be similar to the number range of the Charts of Accounts
1.1.1.2. Secondary Cost Element
Questions:
Q: 1) Define secondary cost elements for planning, allocation and reporting purposes.
A:
a) Internal Activity
b) Assessment
1.1.1.3. Cost Element Group
Questions:
Q: 1) Define cost element groups for planning, allocation, and reporting purposes.
A:
1.1.2. Cost Center

1.1.2.1. Cost Center
Questions:
Q: 1) Define cost centers as the lowest level in your organizational structure at which you
hold one person responsible for the expenses incurred (check whether you have covered
the whole organization).
A:
1.1.2.2. Standard Hierarchy for Cost Centers
Questions:
79
Q: 1) Take your corporate organizational structure and build a hierarchy according to
levels of responsibilities, with cost centers as the lowest level.
A: BALCO Standard Hierarchy
1.1.2.3. Cost Center Group
Questions:
Q: 1) Besides the standard hierarchy, do you need other alternative structure (groups) of
cost centers (for planning, allocation, and reporting purposes)?
A: NA
1.1.3. Activity Type

1.1.3.1. Activity Type
Questions:
Q: 1) Define the type of activity performed by each cost center. Do this by defining one
or more measurable activity type(s) for each cost center.
A:
1. Staff costs
2. Operating Supplies
3. Maintenance costs
4. Production Overheads
5. Corporate overheads
6. Finance Charges
7. Depreciation
Q: 2) Since activity types are posted as secondary cost elements, have you specified the
secondary cost elements to which you want to assign the activity type (one-to-one, or one
cost element for more than one activity type)?
A:
1. Staff costs
2. Operating Supplies
4. Production Overheads
5. Corporate overheads
6. Finance Charges
7. Depreciation
1.1.3.2. Activity Type Group
Questions:
Q: 1) Group your activity types into different categories or similar attributes for planning,
allocation and reporting purposes.
A: BALCO Activity Group
1.1.4. Statistical Key Figures

1.1.4.1. Statistical Key Figures
80
Questions:
Q: 1) Which statistical key figures do you want to use for allocations and reporting (such
as telephone units, headcount, and so on)?
A: Yet to be defined
1.1.4.2. Statistical Key Figure Group
Questions:
Q: 1) Define groups of statistical key figures (such as the group for all headcount
statistical figures).
A: Yet to be defined
1.1.5. Business Process

1.1.5.1. Business Process
Questions:
Q: 1) Do you want to define business processes across different areas of your organization
and plan, enter, and allocate overhead costs on the basis of these?
Explanation: Unlike activity types, business processes can receive costs from more than
one cost center. The process costs can then either be allocated to Cost Object Controlling,
or to Profitability Analysis.
A: [ ]Yes
[ X ]No
Q: 2) Define your business processes (such as sales-order processing).
A: NA
1.1.5.2. Standard Hierarchy for Business Processes
Questions:
Q: 1) Define the standard hierarchy of processes for planning, allocating and reporting
business process costs.
A: NA
1.1.5.3. Business Process Group
Questions:
Q: 1) Do you group your business processes alternatively by categories or similar

attributes so that you can plan, allocate and report on aggregated levels?
A: NA
81
1.1.6. Internal Order
Questions:
Q: 1) What business criteria do you use to classify your internal orders (for example,
overhead orders, accrual orders, investment orders, statistical orders, and so on)?
A:
a) BALCO is required to map the cost of various vehicles, Employees
b) BALCO has assets under construction for building their capital assets
The accrual expenses of P&M orders which are not certified by the maintenance
department, how these can be captured?
Q: 2) What are the types of orders that will be used in the controlling area (such as
investments, marketing, etc.)?
A:
1. Statistical Internal Orders – For Vehicle expenses, Employee Tracking

2. Investment orders – For Asset under construction
3. Conference orders – To track the expenses of the conference convened by BALCO
4. Capital orders which are worthy to be capitalized or charged off
Q: 3) Should some of the orders be used for information purposes only - that is, should
the real posting be on the cost center?
A: Yes, the cost of vehicles and employees are required to have real posting to cost
centers and statistical posting to the orders for information purposes.
1.2. Product Cost Controlling

1.2.1. Procurement Alternative
Questions:
Q: 1) Are you working with multiple supply sources (different vendors) or multiple
production methods (in-house production and subcontracting) for the same material?
A: NA
1.2.2. Cost Component
Questions:
Q: 1) Define the structure of your product cost components (40 cost components max)!
A:
a. Gas
b. Electricity
c. Catalyst
d. Chemicals
e. Bags
f. Staff costs
g. Maintenance
h. Operating Supplies
82
i. Production Overheads
j. Finance Charges
k. Depreciation
Q: 2) Which cost components should be part of the product’s standard price?
A:
l. Gas
m. Electricity
n. Catalyst
o. Chemicals
p. Bags
q. Staff costs
r. Maintenance
s. Operating Supplies
t. Factory Overheads
u. Finance Charges
v. Depreciation
Q: 3) Define the calculation method for each cost component.
Explanation: Define the calculation method for each cost component: 1. Activity quantity
x activity price 2. Material quantity x price (standard price, moving average price,
purchasing info record......) 3. Process quantity x process price 4. Percentage overhead
A:
1. Raw material = Material Quantity X Moving Average Price
2. Semi-finished products = Material Quantity X Standard Price
3. Finished products = Material Quantity X Standard Price
Q: 4) Do you require an alternative structure that breaks down the activity and process
costs in accordance with their original costs (such as wages, salaries, energy,
depreciation)?
A: NA
Q: 5) Which cost components should be part of the product's cost of goods manufactured
in Profitability Analysis?
A: NA
1.2.3. Product Cost Collectors
Questions:
Q: 1) If you are working with period-based controlling, do you want to have one cost
collector for each production method or for each material?
A: BALCO is a repetitive manufacturing and being in Chemical Industry, we would be using

period based controlling. Yes, we would want to have cost collector for each material.
83
1.2.4. Material Ledger Data
Questions:
Q: 1) Do you intend to value the material with more than one currency or valuation
approach? What are those currencies/approaches?
A: NA
Q: 2) Do you want to make subsequent allocations of variances (from purchasing,

production) for raw materials and material produced in-house?
A: NA
Q: 3) Do you want to differentiate between procurement alternatives and manufacturing

processes for your actual costs?
A: NA
1.3. Profitability Analysis

1.3.1. Characteristics
1.3.1.1. Characteristic Definition
Questions:
Q: 1) List the dimensions (characteristics) that you want to create contribution margin
accounting for, according to your reporting requirements.
Explanation: Examples of characteristics: - Region - Sales organization - ...
A:
1. Customer
2. Consignee (Ship to Party)
3. Product
4. Region
5. Country
1.3.1.2. Characteristic Values
Questions:
Q: 1) For the characteristics defined in the previous question, specify values (such as,
regions: North, west, east, south)
A:
a. Customer –
i. SABIC
ii. PIC
b. Product
i. Urea
ii. Methanol
iii. Ammonia
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iv. Bagged Urea
c. Region
i. Far east
ii. South east asia
iii. America
iv. Europe
v. India
d. Country
e. Consignee
1.3.1.3. Characteristic Derivation
Questions:
Q: 1) List the terms (characteriestics) that do not have master data, and state how they
are dependent on other criteria.
A: Characteristics derivation can be done as follows:
f. Customer = Customer from the Sales & Distribution Module

g. Product = Material from the Sales & Distribution Module
h. Region = Region from ship to party from the Sales & Distribution Module
i. Consignee = Ship to Party from Sales & Distribition Module
Q: 2) List the terms (characteristics) that are dependent on each other in a hierarchy.
Explanation: Examples: Determine sales office, region
A: NA
1.3.2. Value Fields

1.3.2.1. Definition of Value Fields
Questions:
Q: 1) Define the report rows (value fields) that you wish to analyze.
A:
1. C&F Price
2. COGM
3. Freight
4. Insurance
5. Demurrages / Dispatch
6. Inspection Charges
7. Marketing Fees
8. Terminal ling
9. Wharf Charges
10. Agency Commission
11. Others
Q: 2) Are you interested only in the revenues and costs that are directly related to
product sales?
A: Yes
85
Q: 3) Do you also wish to see other product-related overhead costs?
A: No, since all the costs of the product and overheads are directly allocable to the
products, there are no separate overheads which need to be captured separately here.
Q: 4) Do you also wish to see other income or expenditures that are not related to your
regular business activity (e.g. product production or sales)?
A: NA
Q: 5) Decide which value fields can be posted as reconcilable with FI (true), and which
are to be filled with accrual valuations.
A: To be discussed
1.3.3. Condition Types

1.3.3.1. Definition of Condition Types
Questions:
Q: 1) Do you want information on accrued values for your result information, that are not
defined as conditions in SD, or do you require user-defined condition types in CO-PA for
planning purposes?
A: NA
F. Business Processes
1. Revenue and Cost Controlling
1.1. Profit and Cost Planning
1.1.1. Cost and Activity Planning
1.1.1.1. Copy Plan from Previous Year to Cost Center Planning
Questions:
Q: 1) Describe your planning process. How do you plan cost centers?
A: The cost centers are planned at the beginning of the year based on the budgets
approved by the management.
Q: 2) Do you want to create your cost center/activity plan based on the planned values of
the previous year? (If so, what is the source of this data and in what form is it stored?
A: No, BALCO has new budgets for all the cost center / activity every year approved by
the management.
86
1.1.1.2. Copy Actual Data to Cost Center Plan
Questions:
A: Cost centers are departments or responsibility centers who give their budget which is
approved by the management at the beginning of the year.
Q: 2) Do you want to create your cost center/activity plan based on the actual values of
the previous year? (If so, what is the source of this data and in what form is it stored?
A: No
1.1.1.3. Redefinition of Plan Version
Questions:
A: The cost centers are planned at the beginning of the year based on the budgets
approved by the management.
Q: 2) Do you want to represent different planning scenarios in parallel?
A: To take a decision, they have 3 levels of planning

a) Each department gives budget for the year
b) Budget Committee/GM/MD makes some changes for the budgets submitted by the
departments
c) Board then finally approves the budget
The plan is to have all the three budgets as different versions so that these different
versions can be available for reference later.
1.1.1.4. Planning Revaluation
Questions:
Q: 1) Do you carry out revaluation (increases or decreases for certain cost elements in
certain cost centers)?
A: Yes
1.1.1.5. Budget Planning
Questions:
Q: 1) Does your organization use the type of budgeting described in the documentation
field?
Explanation: Cost center budgeting allows an organization to enter a summarized

budgeted value for a specific cost center/cost centers. Additionally, this budget can then
be subjected to availability control which takes into account both actual expenditure plus
commitments (subtracted from the budget). Do you perform this kind of budget control
within your organization ?
A: Yes
87
1.1.1.6. Order Budgeting
Questions:
Q: 1) Do you want to plan and control the budget of the order using availability checks?
Explanation: Budgeting for orders makes it possible to create a total budget value for a
given order or given orders. In addition, you can carry out an availability control for this
budget that includes both actual expenses and commitments (deducted from the budget).
Do you use this type of budget control in your enterprise?
A: Yes, This would be mainly used for asset under construction through Project Systems.
1.1.1.7. Activity Type Planning
Questions:
Q: 1) Comment on activity type planning
Explanation: Note that when you plan activity types (define the allocation base per
activity type for the cost center), you define important control parameters, such as price
determination (manual or iterative), plan and actual allocation (direct activity allocation,
target=actual allocation, and so on), and how actual fixed costs are handled (proportionally
or using pre-distribution). The default values taken from the activity type can be
overwritten in planning.
A: Yes, activity planning for the cost centers would be used for all production cost centers
to load the cost of various fixed costs such salaries & wages, maintenance costs,
depreciation, administration overheads etc., to the cost of the product.
1.1.1.8. Definition of Activity Type for Cost Center
Questions:
Q: 1) Comment on defining activity types by cost center
Explanation: This process variant is only relevant if you perform actual costing. This
controlling strategy also requires you to plan by activity types (define allocation
bases/activity type in each cost center). You can specify <1> as the activity quantity. You
need to plan the activity type in order for the cost center (and the subsequent activity
price calculation) can recognize it. This entails defining some important control indicators,
such as price determination (iterative) and actual allocation (direct or indirect activity
allocation). The default values taken from the activity type can be overwritten in planning.
A: Yes, the activity price calculation is based on the activity quantity. Activity quantity
would be the production quantity to derive the cost of the activity per unit of production.
1.1.1.9. Transfer of Statistical Key Figures from LIS (Plan)
Questions:
Q: 1) Are statistical key figures kept in the logistics modules, which you want to use as a
basis for allocations and reporting purposes?
88
A: Statistical key figures are being used for allocation of administration overheads to the
products. Yet to define the Statistical key figure.
1.1.1.10. Transfer of Depreciation/Interest (Activity-Independent)
Questions:
Q: 1) If you are also implementing SAP R/3 Asset Management (FI-AA), do you wish to
transfer the results of the Asset Management depreciation simulation calculation as part of
your planning in Controlling (CO) for depreciation expenses?
Explanation: Ensure that the corresponding assets are assigned to the appropriate cost
centers.
A: Yes, all the assets would be assigned to the respective cost centers. Hence periodic
deprecation would be also directly transferred to the controlling module to the respective
cost centers. Activity dependent would be transferred for indirect cost centers like
administration, finance etc.,
1.1.1.11. Transfer of Depreciation/Interest (Activity-Dependent)
Questions:
Q: 1) If you are also implementing SAP R/3 Asset Management (FI-AA), do you wish to
transfer the results of the Asset Management depreciation simulation calculation as part of
your planning in Controlling (CO) for depreciation expenses?
Explanation: Ensure that the corresponding assets are assigned to the appropriate cost
centers.
A: Yes, all the assets would be assigned to the respective cost centers. Hence periodic
deprecation would be also directly transferred to the controlling module to the respective
cost centers. Activity dependent would be transferred for direct production cost center
like ammonia urea etc.,
1.1.1.12. Transfer of Personnel Costs
Questions:
Q: 1) If you are also implementing SAP R/3 Human Resources, do you want to transfer the
results of personnel cost planning to Controlling (CO) as part of your planning for personnel
expenses?
A: No
1.1.1.13. Transfer of Scheduled Activity PP -> CO-ABC
Questions:
Q: 1) If you are implementing SAP R/3 manufacturing modules, do you want to transfer
activity requirements from sales & operations planning (SOP), long-term planning, or MRP
to Controlling (CO-ABC) as scheduled activities?
Explanation: (and update the relevant business process with the corresponding scheduled
activity)
89
A: NA
1.1.1.14. Transfer of Scheduled Activity from PP to CO-OM-CCA
Questions:
Q: 1) If you implementing the SAP R/3 production modules, do you want to transfer the
activity requirements from sales and operations planning (SOP), long-term planning, or MRP
to Controlling (CO-CCA) as the scheduled production activities?
A: NA
1.1.1.15. Primary Cost Planning (Full Costs)
Questions:
Q: 1) Which procedure do you use for manual planning of primary costs, when you have
costs that are not transferred from other modules, such as HR or FI-AA?
Explanation: Examples are energy costs, maintenance costs, and so on.
A: Manual planning would be done based on the cost center planning for costs other than
FI-AA.
1.1.1.16. Primary Cost Planning (Prop./Fixed)
Questions:
Q: 1) Which procedure do you use for manual planning of primary costs, when you have
costs that are not transferred from other modules, such as HR or FI-AA?
Explanation: Examples are energy costs, maintenance costs, and so on.
A: Manual planning would be done based on the cost center planning for costs other than
FI-AA.
1.1.1.17. Secondary Cost Planning (Full Costs)
Questions:
Q: 1) Do you want to represent activity relationships between cost centers in your

planning?
A: NA, the relation is established between cost centers and secondary cost element based
on the planned assessment cycles.
1.1.1.18. Secondary Cost Planning (Prop./Fixed)
Questions:
Q: 1) Do you want to represent activity relationships between cost centers in your

planning?
A: NA, the relation is established between cost centers and secondary cost element based
on the planned assessment cycles.
90
1.1.1.19. Cost Element Planning (Order with Integrated Planning)
Questions:
Q: 1) Do you want to use integrated internal orders in cost center planning (such as repair
orders, marketing orders) and settle them to cost centers after planning at the cost
element level?
A: NA
1.1.1.20. Cost Element Planning (Order)
Questions:
Q: 1) Do you want to plan costs at the cost element level on overhead cost orders?
A: NA
1.1.1.21. Overall Planning (Order)
Questions:
Q: 1) Do you want to plan overall costs (values only, independent of cost elements) on
overhead cost orders?
A: NA
1.1.1.22. Unit Costing (Order)
Questions:
Q: 1) Do you want to enter planning data in your planning for overhead cost orders, as
well as the cost element information?
Explanation: Example is the entry of planning data for the use of materials, and so on.
A: NA
1.1.1.23. Easy Cost Planning and Execution Services (CO)
Questions:
Q: 1) Are you using internal orders for temporary job cost controlling and want to plan
costs? If so, you can plan the costs with the Easy Cost Planning function.
A: NA
Q: 2) Do you want to trigger subsequent processes based on the planned resources? If so,
you can use the Execution Services function from the cost estimate in Easy Cost Planning.
Explanation: Possible subsequent processes: Purchase requisition, purchase order, material

reservation, material withdrawal, activity and process allocation.
A: NA
91
1.1.1.24. Periodic Reposting of Plan Data
Questions:
Q: 1) Do you periodically move costs from a project/cost center (such as telephone costs)
to other projects/cost centers?
A: Yes, the costs incurred in the Factory overheads cost centers needs to be allocated to
the production cost centers based on such tracing factor. Hence the cost needs to be
periodically moved from a cost center to other cost centers.
Q: 2) Did you define the basis for these allocations (such as, percentage, statistical key
figures, for example telephone units consumed, and so on)?
A: The basis of allocations would have to be defined but the basis would be on statistical
key figures
1.1.1.25. Cost Accrual - Plan
Questions:
Q: 1) Describe how accruals are planned for actual data.
Explanation: Define the cost elements that should be accrued using the target=actual
method (cost element category 04). Define the cost elements that you want to accrue with
imputed tack-on costs (cost element category 03). For the latter, identify the basis (cost
elements) to be used as the basis for accrual calculation.
A: NA
1.1.1.26. Process Cost Planning
Questions:
Q: 1) State how you want to transfer the plan values from Cost Center Accounting to your
business processes.
A: NA
1.1.1.27. Overhead Calculation (Cost Center)
Questions:
Q: 1) Do you plan to allocate a certain type of costs/expenses to cost centers

automatically using overhead rates?
A: NA
1.1.1.28. Overhead Calculation (Business Process)
Questions:
Q: 1) What costs is the cost estimate based on when you compute overhead for internal
orders?
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A: NA
Q: 2) Specify the overhead rates.
A: NA
Q: 3) Will you perform automatic recovery of overheads on specific types of

costs/expenses?
A: [ ]Yes
[X]No
Q: 4) List the different groups of costs/expenses (for example, applying a fixed

percentage rate for recovery of overhead to material issues).
A: NA
Q: 5) For each assignment type, do you distribute overhead as a fixed percentage or

based on the actual total costs?
A: NA
Q: 6) Describe in detail how each of these assignments is performed today in your

organization.
A: NA
Q: 7) What postings do the assignments create?
A: NA
Q: 8) Describe in detail how each of these allocations is performed today in your

organization.
A: Presently the allocations of overheads are done based on %. The % are derived based on
the previous years guidelines.
Q: 9) Do you assign overhead expenses to projects?
A: NA
Q: 10) For each allocation category, do you distribute overhead as a fixed percentage or
A: The allocation category would be based on the actual total costs.
Q: 11) If you use fixed percentages for assignments, how do you handle remaining
variances?
A: NA
Q: 12) For each of these assignments, what causes the overhead (for example, direct
labor expense, labor hours, total WBS expense, others)?
A: NA
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A: NA
Q: 14) Define overhead rates.
A: NA

costs/expenses?
A: [ ]Yes
[ ]No
Q: 16) Do you want to define a percentage for the overhead rate in the cost object?
A: NA
Q: 17) Do you want to define automatic allocation using overhead rates for a certain type
of costs/expenses on orders?
A: NA
Q: 18) Do you want to add a percentage for overhead to the production cost collector?
A: NA
A: NA
Q: 20) Do you perform automatic overhead allocation for specific types of

costs/expenses?
A: NA
A: NA
Explanation: Caution: When you calculate overhead for cost objects that are credited with
the standard cost of goods manufactured times the quantity received in stock, this
overhead should also be contained in the calculated standard cost of goods manufactured
(according to the adjusted standard cost estimate).
A: NA

A: NA
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Q: 24) What costs are the overhead rates based on?
A: NA
Q: 25) Are there any overhead expenses that are not calculated with reference to the
production order but are to be assigned directly to the sales order?
Explanation: Example: Overhead costs for sales and administration.
A: NA
Q: 26) How often do you calculate your planned overhead?
Explanation: The Schedule Manager is well suited to performing periodic allocations. The
program selects project objects, permits error correction, and continues the process.
A: NA
Q: 27) Who is responsible for reconciling the run? (This person will be responsible for
running/monitoring planned overhead.)
A: Management Accountant
Q: 28) Do you calculate overhead for all objects at once or individually for each object.
(Detailed calculation can affect system performance.)
A: NA
Q: 29) Do you have a specific plan version when you calculate overhead?
A: NA
Q: 30) Is overhead calculated for your projects?
A: To be discussed
Q: 31) Is the planned overhead the same as the actual overhead?
A: No
Q: 32) Describe how you calculate overhead for (1) direct costs (2) indirect costs (3) fixed
costs (4) variable costs).
A: Presently we are charging based on %. Now we are going to debit the direct costs to
the cost center and indirect costs would be based on the tracing factors.
Q: 33) Do you include sales and marketing and general and administrative costs in your
overhead calculation?
A: No, we want to charge only factory overheads to the products, corporate overheads
would not be allocated to the products.
Q: 34) Do you reconcile planned and actual overhead?
A: Yes
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Q: 35) Do you process actual overhead on a project by project basis or overall?
A: NA
Q: 36) Do you have project-type-specific overhead calculations?
A: NA
Q: 37) Do you have different overhead costs for each business unit?
A: NA
Q: 38) Do you calculate overhead on materials/labor?
A: NA
Q: 39) At what level of detail do you plan for overhead?
A: The overheads are calculated for Factory overheads, corporate overheads
Q: 40) Do you calculate percentage overhead?
A: NA
Q: 41) Is the calculation dependent on time periods?
A: Monthly
Q: 42) What is the basis for the overhead costs?
A: The overhead costs are based on the planned and actual total costs
Q: 43) Is the basis for overhead planned costs the same as the basis for actual overhead
costs?
A: Yes
Q: 44) What is the formula/schema for applying overhead costs?
A: Assessment & Distribution Cycles
Q: 45) How often do you calculate overhead costs?
A: Monthly
Q: 46) To which accounts/cost elements are the overhead costs posted?
A: Distribution – Primary and Assessment - Secondary cost elements
Q: 47) Does the basis for the overhead costs change during the lifecycle of the project?
A: Yes
Q: 48) Who is responsible for overhead costs? (This person is responsible for running the
overhead calculation.)
A: Budget Accountant/Management Accountant
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Q: 49) Do you evaluate interest charges throughout the project hierarchy?
A: Yes
1.1.1.29. Overhead Calculation (Overhead Cost Order)
Questions:
A: NA

A: NA
A: NA
1.1.1.30. Plan Cost Distribution
Questions:
Q: 1) Do you want to distribute costs from a cost center or a cost center group to CO
objects (cost center, orders, WBS element), and keep the original cost element from the
sender in the receiver object?
A: NA
A:
1.1.1.31. Settlement of Overhead Cost Orders (Planning Data)
Questions:
Q: 1) Do you collect costs/expenses on an internal order that you want represented on a

cost center?
Explanation: Example: The "Vehicles" department can plan an internal order for each truck
to monitor the maintenance costs of each vehicle. The planned order costs are allocated to
the appropriate cost center. This lets the cost center managers analyze their vehicle costs
together with other costs, such as electricity, water, and so on.
A: Yes, Vehicle, Telephone & Employees
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Q: 2) If so, do you want to be able to see the costs of the cost center (settlement under
the original cost element)?
A: To be discussed
Q: 3) Or do you want to summarize/aggregate the costs on the cost center (using one or
more secondary settlement cost elements)?
A: To be discussed
Q: 4) At which level of detail should the costs be transferred?
A: To be discussed
1.1.1.32. Plan Cost Assessment
Questions:
Q: 1) Do you allocation costs from one cost center / group from cost centers to other CO
objects (cost centers, orders, WBS elements) by summarizing the original cost elements
from the sender cost center(s) into one secondary assessment cost element?
A: Yes, Plan cost Assessment is required to transfer Factory overheads (Administration

cost centers) to the production cost centers based on the secondary assessment cost
element.
A: The basis of allocations is based on the statistical key figures
1.1.1.33. Plan Reconciliation
Questions:
Q: 1) Do you need to reconcile the demand for scheduled labor hours (activity types) with
the available capacity?
A: NA
1.1.1.34. Splitting
Questions:
Q: 1) Do you have cases/situations where a cost element in cost center planning is

related to more than one activity (activity type)? If so, see to it that the activity-
independent planned costs are split to the activity types before you calculate the prices.
A: Yes, the cost center planning is done based on the cost elements. There would be
activity independent planned costs such as overheads which have to be assigned to certain
activity.
Q: 2) Define rules for the split.
A:
8. Staff costs
10. Administration costs
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11. Finance Charges
12. Depreciation
Range of cost elements for the above activities needs to be defined.
1.1.1.35. Planned Price Calculation
Questions:
Q: 1) Do you want to calculate the planned price automatically or iteratively by dividing

the planned costs for a cost center/activity type by the planned activity quantities (or
capacities)?
Explanation: Internal activities are allocated using a secondary cost element. If you want
to keep detailed information about the origin of costs such as electricity, depreciation, or
maintenance per activity type, you can use a primary cost component split.
A: Calculate the planned price automatically or iteratively by dividing the planned costs
for a cost center/activity type by the planned activity quantities.
Q: 2) Do you want to calculate planned prices automatically/iteratively for Activity-Based

Costing by dividing the costs planned for the business process by the planned process
quantity?
Explanation: Process costs are allocated using a secondary cost element. If you want to
keep detailed information on the origin of the costs, you can use a primary cost component
split.
A: NA
Q: 3) Do you want to display partial cost rates (primary cost split) for the planned prices
that were calculated automatically/iteratively?
A: Yes
1.1.2. Product Cost Planning
Questions:
Q: 1) What types of costing do you want to use (adjusted standard, monthly, inventory,
and so on)?
A: Standard cost method.
Q: 2) Note: The following processes are located in the Logistics modules: preliminary
costing (production order, product cost collector) and sales order costing
A: Product cost collector
1.1.2.1. Preparation for Costing
Questions:
Q: 1) Did you check if all the source data from other modules is available for calculating
the production costs?
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Explanation: Example Bills of material, routings, and work centers from PP (Production
Planning) or raw material prices and purchasing information records from MM (Materials
Management).
A: Yes
Q: 2) Which valuation approach are you going to use for externally procured materials,
internal activities, external operations, or subcontracting (quotation or purchase order
prices, including delivery costs and cash discounts)?
Explanation: Externally procured materials -> for example, moving average price, raw
materials costing and so on. Internal activities -> periodic price, average price.
A:
i. Externally procured materials - Moving Average price
ii. Semi-finished materials - Standard price
iii. Internal activities - Periodic price
iv. External services - Quotation or purchase order prices
Q: 3) How do you want to allocate overhead in costing: using overhead rates or activity-
based costing, or both?
Explanation: There are overheads in the production costs (allocation in actual data also),
which debit more than one cost center or order. This means that you need to define
allocation cost centers, or orders in Overhead Cost Controlling.
A: We are using activity based costing for allocating overheads in costing.
1.1.2.2. Standard Cost Estimate with Quantity Structure
Questions:
Q: 1) Do you plan your product costs using bills of material (BOM), routings, or
dependencies? If not, how do you plan?
A: [X] Yes
[ ] No
Q: 2) Do you want the single components (gross price, delivery costs and so on) of the
acquisition costs of the externally procured materials in the calculation cost splitting to be
displayed separately?
A: Yes
Q: 3) Do you subcontract any of your manufacturing activities?
Explanation: Do you also provide bills of material for this purpose? Should overhead also be
applied to these?
A: NA
Q: 4) Do your cost estimates contain costs that cannot be captured through BOMs,
routings, overhead rates, or process cost allocation?
A: NA
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Q: 5) Do you plan products that use materials belonging to another plant? If so, do these
plants belong to the same company code?
A: NA
Q: 6) Do you want to analyze the cost of goods manufactured, split by organizational

units involved in the value added process (plant, profit center, company code)?
Explanation: Example: Cost of goods manufactured are displayed separately by plant.
A: NA
Q: 7) Have different currencies been assigned to the organizational units involved in the
costing?
A: NA
Q: 8) Do you want to break down your cost of goods manufactured into primary costs? If
so, are you doing this for production, or simply to display the cost of sales in the
profitability analysis?
Explanation: An example is breaking down production costs into cost-accounting

depreciation, wages, and energy, and so on.
A: Yes, the break-up of the costs are mentioned in the cost component structure
w. Gas
x. Electricity
y. Catalyst
z. Chemicals
aa. Bags
bb. Staff costs
cc. Maintenance & Operating Supplies
dd. Administration Overheads
ee. Finance Charges
ff. Depreciation
Q: 9) If you are using mixed costing, what proportions of the individual procurement
alternatives/manufacturing processes should be used as a basis for costing?
A: NA
1.1.2.3. Standard Cost Estimate Without Quantity Structure
Questions:
Q: 1) Since you are calculating your product costs without access to SAP quantity
structure data, where are you getting the quantity information required for costing?
Explanation: Example: External PPS System
A: NA
Q: 2) Do you subcontract any of your manufacturing activities?
Explanation: Do you also provide bills of material for this purpose? Should overhead also be
applied to these?
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A: NA
Q: 3) Do you plan products that use materials belonging to another plant? If so, do these
plants belong to the same company code?
A: NA
Q: 4) Do you want to analyze the cost of goods manufactured, split by organizational

units involved in the value added process (plant, profit center, company code)?
Explanation: Example: Cost of goods manufactured are displayed separately by plant.
A: NA
Q: 5) Have different currencies been assigned to the organizational units involved in the
costing?
A: NA
Q: 6) Do you want to break down your cost of goods manufactured into primary costs? If
so, are you doing this for production, or simply to display the cost of sales in the
Explanation: An example is breaking down production costs into cost-accounting

depreciation, wages, and energy, and so on.
A: NA
1.1.2.4. Standard Cost Estimate for Co-Products
Questions:
Q: 1) Do you have production processes that ever yield multiple products?
A: Yes
Q: 2) Which rules are used to distribute the costs of goods manufactured to the co-
products?
A: Apportionment Structure, we generally transfer portion of costs of the main process to

the co-products.
1.1.2.5. Costing Analysis
Questions:
Q: 1) Define your reporting requirements for product costing, and reconcile them with
the standard SAP reports. Do you need customer-specific costing reports?
A: To be discussed
1.1.2.6. Price Release with Standard Cost Estimate
Questions:
Q: 1) Do you want to update your product costs (determined using standard costing) as
standard prices in MM?
102
Explanation: This leads to revaluation of the material stock to the new standard price, if
the material is valuated with the standard price.
A: Yes
Q: 2) Do you want to update your product costs (determined using other costings), such as
inventory costing, as plan prices, or valuation prices based on tax law, and so on in MM
(without stock revaluation)?
A: NA
1.1.2.7. Reference and Simulation Costing
Questions:
Q: 1) Do you want to cost material for which there is no material master in Materials
Management (prototypes, research and development)?
A: NA
Q: 2) Do you require templates for the planned costs of sales orders, such as for selling
services?
A: NA
1.1.2.8. Easy Cost Planning and Execution Services (CO)
Questions:
Q: 1) Are you using internal orders for temporary job cost controlling and want to plan
costs? If so, you can plan the costs with the Easy Cost Planning function.
A:
Q: 2) Do you want to trigger subsequent processes based on the planned resources? If so,
you can use the Execution Services function from the cost estimate in Easy Cost Planning.
Explanation: Possible subsequent processes: Purchase requisition, purchase order, material

reservation, material withdrawal, activity and process allocation.
A:
1.1.3. Profit Center Planning
Questions:
Q: 1) Describe your planning processor. How do you plan the Profit Center?
A: BALCO does revenue planning of the profit center based on the planned production and
projected prices of the products in the market.
1.1.3.1. Copy Plan from Previous Year -> Profit Center Planning
Questions:
Q: 1) Do you want to base your Profit Center Planning on the previous year's plan values?
If yes, what is the source of this data and in what form is it available?
103
Explanation: The plan data of the previous year can be copied into the current year and be
simultaneously revaluated via a percentage rate.
A: BALCO has budgets for every year separately approved by the management which
would be taken for profit center planning
1.1.3.2. Copy Actual Costs -> Profit Center Planning
Questions:
Q: 1) Do you want to base your Profit Center Planning on the previous year's actual
values? If yes, what is the source of this data and in what form is it available?
Explanation: The actual data of the previous year can be copied into the current year and
be simultaneously revaluated via a percentage rate.
A: NA
1.1.3.3. Redefinition of Plan Version (Profit Center Planning)
Questions:
Q: 1) Do you want to represent different planning scenarios in parallel?
A: Yes, BALCO would like to have different planning scenarios for profit center planning
1.1.3.4. Excel Upload -> Profit Center Planning
Questions:
Q: 1) Are you planning in MS-Excel and planning to transfer this data to SAP Profit Center
Accounting?
A: Yes
1.1.3.5. Plan Integration of Profit Centers
Questions:
Q: 1) Do you want to transfer plan data to PCA from other applications? From which
application(s)?
Explanation: The plan version, from which data is transferred in the Profit Center
Accounting, must also be defined in Profit Center Accounting.
A: NA
1.1.3.6. Manual Profit Center Planning
Questions:
Q: 1) Describe your process for manual profit center planning.
A: NA
104
Q: 2) Do you intend to use formula planning within the context of manual Profit Center
Planning? Formula Planning How many of your quotations become orders, If few become
orders consider not using the
A: NA
1.1.3.7. Profit Center Distribution: Plan
Questions:
Q: 1) Do you carry out distributions from one profit center to another profit center within
the same controlling area?
Explanation: Allocation means that you want to copy the original cost element(s) from the
sender PCTR to the receiver PCTR.
A: NA
1.1.3.8. Plan: Profit Center Assessment
Questions:
Q: 1) Do you assess values from one profit center to another within the same controlling
area? code?
Explanation: Assessment means that you want to allocate the original cost elements using
one or more assessment cost elements (secondary cost elements) instead of retaining the
original cost element.
A: NA
1.1.3.9. Profit Center Analysis
Questions:
Q: 1) Define your report requirements within the context of Profit Center Planning and
compare this with the SAP standard reports. Do you require customer-specific Profit Center
Reports?
A: To be discussed
1.2. Actual Cost/Revenue Allocation

1.2.1. Overhead Allocation
1.2.1.1. Direct Activity Assignment Using Time Sheet Processing
Questions:
Q: 1) Do you base direct activity allocation to CO objects on this data?
A: NA
Q: 2) How do employees record their working time (time, detail, medium/system)?
A: NA
105
1.2.1.2. Time Sheet Permit
Questions:
Q: 1) Explain the permit procedure for working time or recording of activity allocation for
your employees.
A: NA
Q: 2) How many employees does the person responsible for approval manage?
Explanation: Consider using the CATS workflow to automate the approval process.
A: NA
1.2.1.3. Transfer Time Sheet Data to CO
Questions:
Q: 1) Do you want to transfer recorded activity allocations to Controlling using the time
sheet?
A: [ ]Yes
[X]No
Q: 2) How often does this transfer take place (daily, weekly and so on)?
A: NA
Q: 3) Which time sheet-based reports do you require (for example, employee utilization,
employee hours by cost center)?
A: NA
1.2.1.4. Time Sheet Report
Questions:
Q: 1) Do you need to see days that have not timesheet entries?
Explanation: There is a standard report for missing days.
A: NA
Q: 2) Do you need an evaluation, do see the days on which personnel enter more than a
defined number of hours?
Explanation: There is a standard report for overtime.
A: NA
Q: 3) Do you have to see the employee name in the documents for the receiving
component?
106
Explanation: Consider using a User Exit.
A: NA
Q: 4) Do different roles need to see different timesheet information? (If yes, create
report variants.)
A: NA
1.2.1.5. Direct Activity Allocation (Controlling)
Questions:
Q: 1) Do you want to allocate costs manually from a sender cost center to a receiver
(internal order, cost center, and so on) by valuating the added quantity with a price?
Explanation: Example You settle 2 electrician hours from the electrician cost center to a
receiving cost center, and 1 hour costs USD 50.
A: [ ]Yes
[X]No
Q: 2) Describe your direct activity allocation processes.
A: NA
1.2.1.6. Transfer of Primary Costs to Cost Center/Order
Questions:
Q: 1) Create a matrix that contains the primary cost elements derived from the chart of
accounts in the rows, and assign these to the possible account assignment objects (cost
center, order).
Explanation: (Information on defining the field selection in FI/MM) (Information on

defining the field selection in FI/MM) Assign these for cost elements that are always
assigned to the same object number (cost center, order number, cost object). (Information
on automatic account assignments to CO).
A: NA
1.2.1.7. Manual Funds Reservation
Questions:
Q: 1) For your organization, do you want to display manual funds reservation (manual
commitments) for expected expenses, where you cannot yet foresee how they are
incurred?
Explanation: This appears in the reports as commitments for the budget.
A: Yes to be discussed
1.2.1.8. Manual Funds Reduction

107
Questions:
Q: 1) When you use manual funds reservation, describe the reduction process for the
manual commitment.
Explanation: Note: Unlike the commitments for purchase requisitions and purchase orders,
the commitment created by the manual funds reservation is not automatically reduced by
actual incurrence of costs. Therefore you need to clarify by whom, at which time, and in
which form (single or collective processing) the commitment is to be reduced.
A: To be discussed
1.2.1.9. Manual Cost Allocation
Questions:
Q: 1) Do you want to allocate certain (primary and/or secondary) cost elements

manually, without using the usual tools for distribution, assessment, or activity allocation?
A: NA
1.2.2. Product Cost Allocation
Questions:
Q: 1) Note: Contained as a process in the respective Logistics modules (production

orders/product cost collectors/sales orders).
A: Product cost collector (Repetitive Manufacturing)
Q: 2) Are you using Product-Cost by Sales Order?
Explanation: If so, actual costs are updated directly to the sales order item. If so, actual
costs are updated directly to the sales order item. For comprehensive information on this,
see the R/3 Library under Financials -> Controlling -> Product Cost Controlling -> Cost
Object Controlling -> Product Cost by Sales Order.
A: NA
1.2.2.1. Simultaneous Costing
Questions:
Q: 1) Comment on simultaneous costing
Explanation: The simultaneous cost estimate consists of actual account assignments to

cost objects that result from goods movements for raw materials and semifinished goods,
confirmation of internal activities, external bills, and so on. Consequently, you should work
closely with colleagues working with Logistics and Financial Accounting when drawing up
the concept for simultaneous costing. This is especially relevant for automatic account
determination.
A: NA
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1.2.3. Profit Center Allocation
1.2.3.1. Actual Data Transfers on Profit Center
Questions:
Q: 1) Do you want to transfer plan data to PCA from other applications? From which
application(s)?
Explanation: The plan version from which data is transferred in the Profit Center
Accounting, must also be defined in Profit Center Accounting.
A: NA
1.2.3.2. Document Entry in Profit Center Accounting
Questions:
Q: 1) In Profit Center Accounting, do you want to enter other data which is not
transferred by the integration of EC-PCA?
A: Yes, some rectification which may occur needs to rectified by the document entry
1.2.3.3. Actual Transfer of Additional Balance Sheet Items to EC-PCA
Questions:
Q: 1) Besides the balance sheet items transferred at period end, (see period end closing
Profit Center Accounting) do you wish to transfer other B/S items transaction-based? If yes,
which ones?
A: All the balance sheet accounts are required for profit center accounting. BALCO
requires Product wise balance sheet and profit & loss account.
1.2.3.4. Manual Entry of Statistical Key Figures
Questions:
Q: 1) In Profit Center Accounting, do you want to enter other statistical key figures which
are not transferred by the integration of EC-PCA?
A: NA
1.2.4. Cost and Revenue Allocation to Profitability Analysis

1.2.4.1. Transfer and Valuation of Incoming Sales Orders
Questions:
Q: 1) Do you want to transfer the sales order receipt to profitability analysis? Which
period do you want to show the sales order result in?
Explanation: Options: - Period in which the order was entered - Period for the expected
delivery / billing plan
A: Sales order data needs to be captured into Profitability analysis based on the period for
the expected delivery.
109
Q: 2) Which sales order values do you want to track in reporting? Examples: Gross
revenue, net revenue, or cost-of-sales.
a. C&F Price
b. COGM
c. Freight
d. Insurance
e. Demurrages / Dispatch
f. Inspection Charges
g. Marketing Fees
h. Terminal ling
i. Wharf Charges
j. Agency Commission
k. Others
1.2.4.2. Transfer and Valuation of Billing Documents (Direct Sale)
Questions:
Q: 1) To which report rows (value fields) are the true conditions in the billing document
to be assigned? In addition, you do want to transfer statistical conditions?
A: Yes
Q: 2) Which values are to be used in valuation in addition to the conditions in SD?
Explanation: Example Sales deductions, such as commission, allowances, shipping costs,

warranties, and so on.
1. C&F Price
2. COGM
3. Freight
4. Insurance
5. Demurrages / Dispatch
6. Inspection Charges
7. Marketing Fees
8. Terminal ling
9. Wharf Charges
10. Agency Commission
11. Others
Q: 3) Do you want to update the cost component split for cost of goods manufactured
from product costing in profitability analysis by transaction?
Explanation: If you want to reconcile the cost of sales with FI, you need to transfer the
VPRS condition to CO-PA also.
A: No
1.2.4.3. Transfer and Valuation of Billing Documents (Third-Party

Transaction)
110
Questions:
Q: 1) Do you perform third-party transactions in the SAP sense? This means that sold
products are delivered to customers directly from the supplier; no goods receipt or goods
issue is posted in your company.
Explanation: To execute third party business transactions, you need to post the incoming
invoices for the vendor to the customer before the invoices are sent out. In this case, you
are urgently required to transfer the VPRS condition from SD.
A: NA
1.2.4.4. Transfer and Valuation of Billing Documents (Inter-company

Processing)
Questions:
Q: 1) Do you perform inter-company business in the SAP sense? This means that sold
goods are delivered from a plant in a company code that is not the same as the invoicing
company code.
A: NA
Q: 2) Do you want to compare the external revenues with the cost of goods manufactured
of the company code of production?
A: [ ]Yes
[X ]No
1.2.4.5. Transfer and Valuation of Billing Documents (Complaints

Processing)
Questions:
Q: 1) How should credit memos, returns, and free deliveries be shown in Profitability
Analysis?
Explanation: Example: You need to ensure that the value field for freight is reset for
returns.
A: Yes
1.2.4.6. Transfer of Customer Agreements to Profitability Analysis
Questions:
Q: 1) Do you want to transfer customer arrangements to Profitability Analysis as passive

budget checks?
A: NA
1.2.4.7. Direct Posting of Costs and Revenues From FI
Questions:
111
Q: 1) Do all your revenue and sales deduction postings come in from the Sales and
Distribution component, or are there additional postings to those categories that originate
in the General Ledger?
A: NA
Q: 2) Which additional expenses and revenues that were not carried in Overhead Cost
Controlling nor in Product Cost Controlling do you want to transfer to Profitability Analysis?
Explanation: These can also be expenses/revenues that have previously been posted in CO-
PA for accrual purposes only, and which you want to compare with the actual values.
A: BALCO wants the corporate overheads including marketing costs to be transferred to

CO-PA. The basis of allocation needs to be finalized.
Q: 3) At which level (characteristics) do you want to post this data to profitability

analysis? Which cost elements should be transferred to which value fields?
A: To be defined.
1.2.4.8. Automatic Additional Transfer into Profitability Analysis
Questions:
Q: 1) Do all your revenue and sales deduction postings come in from the Sales and
Distribution component, or are there additional postings to those categories that originate
in the General Ledger?
A: All sales related deductions are posted to Sales & Distribution Module.
Q: 2) At which level (characteristics) do you want to post this data to profitability

analysis? Which cost elements should be transferred to which value fields?
A: To all the characteristics mentioned above.
Q: 3) Create a matrix that contains the primary cost and revenue elements derived from
the chart of accounts in the rows, and assign these to the possible account assignment
objects (combinations of characteristics in CO-PA).
Explanation: (As information for defining the field selection in FI/MM, and for defining the
characteristic groups) defining the characteristic groups) Assign these to the cost elements
that are always assigned to this object number (profitability segment). What value fields
do you want to post the values for which cost elements to?
A: NA
Q: 4) Decide which automatic postings from FI or MM should be transferred into

Profitability Analysis automatically.
Explanation: Examples: Expenses and revenue from the revaluation or transfer of stock
between plants.
112
A: Interest Income??
1.3. Period-End Closing (Controlling)

1.3.1. Period-End Closing in Overhead Cost Controlling
1.3.1.1. Actual Periodic Reposting
Questions:
Q: 1) Do you periodically move costs from a project/cost center (such as telephone costs)
to other projects/cost centers?
A: Yes
A: Statistical key figures – To de defined
1.3.1.2. Accrual Calculation in Cost Center Accounting (Target = Actual

Method)
Questions:
A: To be discussed
1.3.1.3. Accrual Calculation in Cost Center Accounting (Percentage

Method)
Questions:
A:
1.3.1.4. Actual Cost Distribution
Questions:
Q: 1) Do you want to distribute costs from a cost center or a cost center group to CO
objects (cost center, orders, WBS element), and keep the original cost element from the
sender in the receiver object?
A: To be discussed
113
A: Statistical key figures
1.3.1.5. Entry of Sender Activities
Questions:
Q: 1) When you use indirect activity allocation (manual entry), are you able to measure
and post the activities on the sender cost center that are to be allocated?
A: [ ]Yes
[ ]No
1.3.1.6. Actual Indirect Activity Allocation (Manual Entry)
Questions:
Q: 1) Application example:
Explanation: The "Quality control" cost center provides 1,000 hours of the "Checking"
activity type. It provides activity to the "Goods receipt" and "Finished product" cost
centers. The allocation is made using the allocation base "Number of checked items" (PP).
On the "Goods receipt" cost center, there are 4,000 of these items, and on the "Finished
product" cost center, there are 6,000. This corresponds to an activity input of 400 hours by
the "Goods receipt" cost center, and 600 hours by the "Finished product" cost center. The
price for each activity unit on the "Quality control" cost center" is 50 USD/h. This activity
output creates costs of 50,000 USD on the "Quality control" cost center. The receiver cost
centers are debited according to their allocation base "Checked items" with the following
costs: Goods receipt: (50,000 USD x 4,000 PP) / 10,000 PP = 20,000 USD Finished
products: (50.000 USD x 6,000 PP) / 10,000 PP = 30,000 USD
A: NA
1.3.1.7. Actual Indirect Activity Allocation (Indirect Entry)
Questions:
Q: 1) Example:
Explanation: In the application example, the activity is determined using weighting factors
on the sender, with tracing factors from the receiver. You need to define these tracing
factors for the sender. The sender rule in this case is for quantities determined invertedly.
You can use any receiver rule. The receiver tracing factors are as follows: "Goods receipt":
4,000 items for checking. "Finished products": 6,000 items for checking. 0,4 hours are
required by the "Quality control" cost center for checking. To do this, a weighting factor of
0,4 is defined on the sender for the "Check" activity type. This results in 1,600 hours
activity input for the "Goods receipt" cost center, and 2,400 hours for the "Finished
products" cost center. The "Check" activity is valuated at 5 USD/h. This means that the
sender is credited with 20,000 USD, the "Goods receipt" cost center is debited with 8,000
USD, and the "Finished products" cost center is debited with 12,000 USD.
A: NA
114
1.3.1.8. Target=Actual Activity Allocation
Questions:
Q: 1) Do you want to have the system automatically calculate the actual activity input of
primary cost centers (receivers) from secondary cost centers (senders) on the basis of the
operating level and the planned activity input of the receiver cost center?
Explanation: This also determines the actual quantity of the sender cost center using the
target quantity of the receiver. This technique is useful when you can determine a direct
proportional relationship between the activity input and the activity output of the primary
cost center (such as between energy hours and machine hours).
A: NA
1.3.1.9. Template Allocation (Overhead Cost Order)
Questions:
Q: 1) Do you have process costs that you want to allocate to overhead cost orders?
A: NA
Q: 2) Which factors influence the amount of costs to be allocated?
A: NA
1.3.1.10. Overhead Calculation (Overhead Cost Order)
Questions:
A: NA

A: NA
A:
1.3.1.11. Settlement of Overhead Orders (Actual Data)
115
Questions:
Q: 1) Which order types should be settled?
A: NA
Q: 2) To which receivers, at which rates (percentage, amount, or equivalence number)

and under which cost elements (original cost element or settlement cost element) should
settlement be made?
A: NA
1.3.1.12. Settlement of Accrual Orders
Questions:
Q: 1) Which order types should be settled?
A: To be discussed
Q: 2) To which receivers, at which rates (percentage, amount, or equivalence number)

and under which cost elements (original cost element or settlement cost element) should
settlement be made?
A: NA
1.3.1.13. Actual Cost Assessment
Questions:
Q: 1) Do you allocation costs from one cost center / group from cost centers to other CO
objects (cost centers, orders, WBS elements) by summarizing the original cost elements
from the sender cost center(s) into one secondary assessment cost element?
A: Yes, To be discussed
A: Statistical key figures
1.3.1.14. Overhead Calculation (Business Process)
Questions:
Q: 1) What costs is the cost estimate based on when you compute overhead for internal
orders?
A: NA
Q: 2) Specify the overhead rates.
A: NA
116
costs/expenses?
A: [ ]Yes
[ ]No

A: NA
Q: 5) For each assignment type, do you distribute overhead as a fixed percentage or

A: NA
Q: 6) Describe in detail how each of these assignments is performed today in your

organization.
A: NA
A: NA
Q: 8) Describe in detail how each of these allocations is performed today in your

organization.
A: NA
Q: 9) Do you assign overhead expenses to projects?
A: NA
Q: 10) For each allocation category, do you distribute overhead as a fixed percentage or
A: NA
Q: 11) If you use fixed percentages for assignments, how do you handle remaining
variances?
A: NA
Q: 12) For each of these assignments, what causes the overhead (for example, direct
labor expense, labor hours, total WBS expense, others)?
A: NA
117
A: NA
A: NA

costs/expenses?
A: [ ]Yes
[ ]No
A: NA
A: NA
Q: 18) Do you want to add a percentage for overhead to the production cost collector?
A: NA
A: NA
Q: 20) Do you perform automatic overhead allocation for specific types of

costs/expenses?
A: NA
A: NA
118
A: NA

A: NA
A: NA
Q: 25) Are there any overhead expenses that are not calculated with reference to the
production order but are to be assigned directly to the sales order?
Explanation: Example: Overhead costs for sales and administration.
A: NA
Q: 26) How often do you calculate your planned overhead?
Explanation: The Schedule Manager is well suited to performing periodic allocations. The
program selects project objects, permits error correction, and continues the process.
A: NA
Q: 27) Who is responsible for reconciling the run? (This person will be responsible for
running/monitoring planned overhead.)
A: NA
Q: 28) Do you calculate overhead for all objects at once or individually for each object.
(Detailed calculation can affect system performance.)
A: NA
Q: 29) Do you have a specific plan version when you calculate overhead?
A: NA
Q: 30) Is overhead calculated for your projects?
A: NA
Q: 31) Is the planned overhead the same as the actual overhead?

119
A: NA
Q: 32) Describe how you calculate overhead for (1) direct costs (2) indirect costs (3) fixed
costs (4) variable costs).
A: NA
Q: 33) Do you include sales and marketing and general and administrative costs in your
overhead calculation?
A: NA
Q: 34) Do you reconcile planned and actual overhead?
A: NA
Q: 35) Do you process actual overhead on a project by project basis or overall?
A: NA
Q: 36) Do you have project-type-specific overhead calculations?
A: NA
Q: 37) Do you have different overhead costs for each business unit?
A: NA
Q: 38) Do you calculate overhead on materials/labor?
A: NA
Q: 39) At what level of detail do you plan for overhead?
A: NA
Q: 40) Do you calculate percentage overhead?
A: NA
Q: 41) Is the calculation dependent on time periods?
A: NA
Q: 42) What is the basis for the overhead costs?
120
A: NA
Q: 43) Is the basis for overhead planned costs the same as the basis for actual overhead
costs?
A: NA
Q: 44) What is the formula/schema for applying overhead costs?
A: NA
Q: 45) How often do you calculate overhead costs?
A: NA
Q: 46) To which accounts/cost elements are the overhead costs posted?
A: NA
Q: 47) Does the basis for the overhead costs change during the lifecycle of the project?
A:
Q: 48) Who is responsible for overhead costs? (This person is responsible for running the
overhead calculation.)
A: NA
Q: 49) Do you evaluate interest charges throughout the project hierarchy?
A: NA
1.3.1.15. Variance Calculation for Overhead
Questions:
Q: 1) Do you want to display cost center variances by variance category?
A: NA
Q: 2) Do you want to allocate cost center variances subsequently to other cost

centers/cost objects (using subsequent valuation with actual prices) or post them to
Profitability Analysis?
A: NA
1.3.1.16. Pre-distribution of Fixed Costs
Questions:
121
Q: 1) Do you want to pre-distribute fixed costs independent of the receiving cost centers
actual usage of resources?
Explanation: Do you want to debit a receiver cost center with the fixed cost of the sender
according to the plan?
A: NA
1.3.1.17. Splitting
Questions:
Q: 1) Comment on splitting
Explanation: Normally, cost elements in Cost Center Accounting are not assigned to
activity types for actual postings. Be sure to split the costs posted independent of activities
to the individual activity types before you calculate the actual price.
A: List of cost elements to be linked to the Activities for cost splitting

1. Catalyst
2. Staff costs
3. Maintenance / Operating Supplies
4. Depreciation
5. Administrative Overheads
6. Finance Charges
A: Based on the Activity Quantity (i.e., Production Quantity)
1.3.1.18. Actual Price Calculation
Questions:
Q: 1) Do you want to calculate actual prices for Cost Center Accounting and / or Activity-
Based Costing on an automatic or iterative basis?
A: Automatic Calculation based on the Actual costs of the cost elements in the cost center
Q: 2) Do you want to represent actual prices as periodic, average, or aggregated prices?
A: Periodic
Q: 3) Do you want to set actual prices manually?
A: Yes, to be discussed
1.3.1.19. Revaluation at Actual Prices
Questions:
Q: 1) How do you want to organize subsequent valuation? (see documentation)

122
Explanation: You can valuate subsequently using actual prices without changing the
original allocations made using planned prices. Instead, the system posts the difference to
the allocation made using the planned price with a separate business transaction. with a
separate business transaction. When you valuate subsequently using the original business
transaction, the system changes the original allocation so that you can no longer distinguish
the difference between the two valuations. Distinguish the difference between the two
valuations. In subsequent valuation using actual prices, you want to reallocate cost center
variances to other cost centers or cost objects. The other strategy would be to post the
variances to Profitability Analysis.
A: Yes, separate business transaction
1.3.1.20. Reconciliation Financial Accounting/Controlling
Questions:
Q: 1) Do you intend to allocate costs from one cost center/order of a company code to
another cost center/order of another company code and represent this as an intercompany
transaction in FI?
A: NA
1.3.1.21. Business Process Analysis
Questions:
Q: 1) Provide the consultant with your most critical business process reports.
A: To be discussed
1.3.1.22. Cost Center Analysis
Questions:
Q: 1) Provide the consultant with your most critical cost center reports.
A: To be discussed
1.3.1.23. Analysis of Overhead Orders
Questions:
Q: 1) Describe the critical factors for order analysis, such as plan/budget vs. actual
analysis, order group analysis, or detailed line item analysis.
A: NA
1.3.2. Period-End Closing: Periodic Product Cost Controlling

1.3.2.1. Template Allocation (Cost Object)
Questions:
Q: 1) Do you have process costs that you want to allocate to a cost object?
A: [ ]Yes
[ ]No
123
A: NA
1.3.2.2. Revaluation at Actual Prices
Questions:
Q: 1) How do you want to organize subsequent valuation? (see documentation)
Explanation: You can valuate subsequently using actual prices without changing the
original allocations made using planned prices. Instead, the system posts the difference to
the allocation made using the planned price with a separate business transaction. with a
separate business transaction. When you valuate subsequently using the original business
transaction, the system changes the original allocation so that you can no longer distinguish
the difference between the two valuations. Distinguish the difference between the two
valuations. In subsequent valuation using actual prices, you want to reallocate cost center
variances to other cost centers or cost objects. The other strategy would be to post the
variances to Profitability Analysis.
A: YES
1.3.2.3. Actual Cost Distribution - Product Costs
Questions:
Q: 1) Do you want to use the calculated target costs on the orders for the distribution
within the cost object hierarchy to the product cost collector?
Explanation: Note: Required if you want to create a periodic unit price or periodic
allocation price, and if the total costs are to be displayed on the orders.
A: NA
1.3.2.4. Overhead Calculation (Cost Object)
Questions:
A: NA
A: NA
1.3.2.5. Template Allocation (Product Cost Collector)
Questions:
Q: 1) Do you have process costs that you want to allocate to a product cost collector?
A: NA
124
A: NA
1.3.2.6. Overhead Calculation (Product Cost Collector)
Questions:
A: NA

A: NA
A: NA
1.3.2.7. WIP Calculation Based on Target Costs
Questions:
Q: 1) Note: WIP for target costs is determined by valuating the actual postings with the
target costs of the product costing.
A: NA
Q: 2) Describe the level of detail and the cost breakdown that you want for your WIP.
Define the WIP components that do not require activation (no transfer to FI)
A: NA
1.3.2.8. Periodic Variance Calculation
Questions:
Q: 1) Which production variance categories do you want to calculate in Cost Object

Controlling, and which of these should be transferred to CO-PA (operating profit) in
consultation with Profitability Analysis?
A: SAP defined variances are sufficient for the processes
Q: 2) Do you want to valuate the scrap? If so, specify how.

125
A: NA
Q: 3) Do you want to report scrap separately within the production variances?
A: NA
1.3.2.9. Settlement of Cost Object Hierarchy
Questions:
Q: 1) Define a settlement rule for the cost object in the cost object hierarchy.
Explanation: Note: If there is no distribution of actual cost for the cost object hierarchy,
then this needs to be maintained.
A: NA
1.3.2.10. Settlement of Product Cost Collector
Questions:
Q: 1) Do you want to see your production variances in Profitability Analysis?
Explanation: Define the value fields for profitability analysis (for materials where the
material price control indicator is set to S) for transferring the variances.
A: Yes, the variances needs to be transferred to the Profitability analysis
Q: 2) Note on transferring the price differences to FI or updating the factory activity to

production orders:
Explanation: To debit the cost object, define a cost element (category 22), which is
assigned to the GBB-AUA business transaction in MM Account determination.
A: NA
1.3.2.11. Data Collection for Product Drilldown
Questions:
Q: 1) How do you want to summarize product costs?
Explanation: Product drilldown provides you with a fixed hierarchy that displays the
product costs per plant, product group, product group, cost element, and if necessary, the
period. If you want to summarize your product costs using other criteria, such as, sold-to-
party, profit center, business area, then you need to use order summarization. This enables
you to create hierarchies that include all of the fields in the order master record. If you
require more summmarization criteria, you can use classification to define criteria for
summarization as needed.
A: Yes
Q: 2) How do you want to group your materials for the summarized analysis?
126
A: NA
Q: 3) Is this grouping and its requirements regarding product groups and material groups
identical in Logistics?
A: To be discussed with MM during Integration
1.3.2.12. Product Cost Analysis in Product Cost by Period
Questions:
Q: 1) Define your reporting requirements in Cost Object Controlling, and compare them
to the SAP standard reports. Do you require customer-specific cost object reports?
A: YES
1.3.3. Period-End Closing for Profit Center Accounting

1.3.3.1. Profit Center Distribution: Actual
Questions:
Q: 1) Do you need to distribute revenues, gains and balance sheet accounts from the
profit centers to other profit centers for the end of period, and simultaneously pass on the
sender cost center or the balance sheet account to the receiver profit center?
A: NA
Q: 2) What is the basis for allocating these values?
A: NA
1.3.3.2. Actual Profit Center Assessment
Questions:
Q: 1) For period-end closing, do you need to assess revenues, costs, and balance sheet
accounts from the profit centers to other profit centers, and transfer the sender cost
element or balance sheet account to the profit center receiver?
A: NA
Q: 2) What is the basis for allocating these values?
A: NA
1.3.3.3. Profit Center Analysis
Questions:
Q: 1) Define your report requirements within the context of Profit Center Planning and
compare this with the SAP standard reports. Do you require customer-specific Profit Center
Reports?
A: To be discussed
127
1.3.4. Period-End Closing for Profitability Analysis
1.3.4.1. Settlement of Sales Orders
Questions:
Q: 1) If you enterprise has make-to-order production with sales order controlling, but you
do not use results analysis, assign the cost elements that were posted on sales orders to
the relevant value fields in the profitability analysis.
A: NA
Q: 2) If you are using results analysis, how detailed should the information on cost-of-
sales and revenues be in profitability analysis?
A: NA
1.3.4.2. Settlement of Production Variances
Questions:
Q: 1) Do you want to transfer production variances to profitability analysis?
A: YES
Q: 2) In which value fields is each variance category to be updated?
A: Standard SAP defined variance categories
1.3.4.3. Settlement of Internal Orders (Actual Data)
Questions:
Q: 1) Do you want to settle costs and/or revenues from internal orders directly to
A: To be discussed
Q: 2) Assign the appropriate value fields (report rows) of Profitability Analysis to the costs
and revenues posted to the projects.
A: NA
1.3.4.4. Project Settlement
Questions:
Q: 1) Do you want to settle costs and/or revenues from projects (such as customer
projects) directly to profitability analysis?
A: NA
Q: 2) Assign the appropriate value fields (report rows) of Profitability Analysis to the costs
and revenues posted to the internal orders.
A: NA
128
1.3.4.5. Actual Allocation of Process Costs to Profitability Analysis
Questions:
Q: 1) Do you want to transfer the posted process costs to profitability analysis?
A: NA
Q: 2) Which level do you want to assign these costs (using the step-by-step principles of
analysis of fixed-cost allocation)? (for example, company code, country, enterprise area,
sales organization)
A: NA
Q: 3) Which allocation methods do you require for transferring the planned process costs
to profitability analysis?
Explanation: Options: - Assessment - Indirect activity allocation - Allocation using process

template
A: NA
1.3.4.6. Actual Allocation of Cost Center Costs to Profitability Analysis
Questions:
Q: 1) Do you want to transfer the posted cost center costs to profitability analysis?
A: To transfer corporate overheads cost centers including marketing costs to Profitability

analysis
Q: 2) Which level do you want to assign these costs (using the step-by-step principles of
analysis of fixed-cost allocation)? (for example, company code, country, enterprise area,
sales organization)
A: NA
Q: 3) Which allocation methods are to be used for transferring the posted cost center
costs to profitability analysis?
Explanation: Options: - Assessment - Indirect activity allocation - Indirect activity

allocation
A: NA
1.3.4.7. Actual Top-Down Distribution
Questions:
Q: 1) Do you want to assign posted actual costs for period-end closing to a more detailed
level than when the original posting was made? (For example, distribution of automatic
postings from the company code level to enterprise areas)
A: NA
Q: 2) Which values (revenues, etc.) do you want to distribute?
A: NA
129
1.3.4.8. Analysis of Results and Contribution Margins
Questions:
Q: 1) Determine the structure of the contribution margin scheme you want to report on in
CO-PA.
A: Yes
Q: 2) What are the calculated ratios?
A: Yes
Q: 3) Which characteristic groups do you need for navigating in a report?
Explanation: You should define summarization levels for these groups if data volumes are
large.
A: NA
130

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Q & A Data Base

FINANCE & CONTROLLING

Date of the last changes:

_______________ ____________________ ______________________

Sign Off Date Signature Customer Signature Consulting

Q: 1) Do you want to structure the company into one or more separate

Q: 2) Do you have foreign companies?

Q: 3) Which companies are going to work with which chart of account?

Q: 5) Are all companies managed in FI company codes, and is FI integration

Q: 6) In which form and at which dates do you collect the reported

1.2. Credit Control Area

Q: 1) On which level do you perform credit control? On company code

A: One Credit control area

Q: 2) What is the default credit limit for your customers?

A: At present – BALCO India

A: IAS AND IFRS

Q: 3) Which companies are required to use a statutory chart of accounts

Q: 4) Do all companies use the same operating chart of accounts?

Q: 6) Identify legal entities holding minority interest.

Q: 7) Are goods/services exchanged between your different legal entities?

Q: 8) Specify the different levels of consolidation (for example, by

Q: 9) Are there any transactions that have to be included, when these

Q: 12) Which functions will be performed on a cross-company level?

1.4 Controlling Area

Q: 1) Note on controlling area:

A: BALCO assigned to BALCO controlling area

Q: 4) If you have multiple controlling areas: Do you intend to have

Q: 5) If you wish to have unified Controlling, which currency or currencies

Q: 6) Which chart of accounts do you want to use in your controlling area?

A: Product-wise; One for production overheads; One for Corporate

1.6 Operating Concern

Explanation: Note: This means that different enterprise branches are

Q: 2) In SAP the operating concern is an organizational unit that spans one

Q: 3) What currency should be used for the operating concern?

Material Valuation Area

Q: 1) Is the value of a material the same throughout the company, or can

Q: 2) Are you going to use Product Cost Planning and/or Production

Q: 3) Which enterprise entities carry out production and what do they

A: All final and intermediaries

Q: 7) Does the manufacturing/distribution process for a product differ such

Q: 1) Which companies use the same chart of accounts?

Q: 2) How many natural accounts will each chart of accounts contain?

Q: 3) What is the document numbering logic?

Explanation: Possible reconciliation with SD/MM

Q: 5) Will the chart of accounts need to be approved? If so, by whom?

Q: 6) Which maintenance language should be used for each chart of

Q: 7) Which additional languages do you wish to use for your charts of

Q: 8) Please provide your current Chart of Accounts.

Q: 1) For which of your legal entities will you be implementing FI-AA?

3.1. Depreciation area

Q: 1) Is there a distinction necessary between book depreciation (for

A: Not required now

A: Not required now

3.2. Chart of depreciation

Q: 1) In which countries do you manage fixed assets?

Q: 2) Are there any statutory asset valuation requirements which would

3.3. Asset class

A: List given separately

A: List given separately

Q: 1) What are your terms of payment for your customers?

A: SABIC 107 days; PIC generally 23 days

Q: 3) What kind of payments do you get from your customer?

Q: 4) Are reminders sent? How long is the waiting period?

_ ________